CPI (Consumer Price Index)

The Consumer Price Index (CPI) measures how much the average price of everyday goods and services—like groceries, gas, and rent—changes over time. It's basically inflation's report card. You'll hear about CPI constantly in financial news because the Federal Reserve uses it to decide whether to raise or lower interest rates, which affects everything from mortgage costs to stock valuations. When CPI rises sharply, it means your money buys less than it used to. For example, if CPI jumped 5% last month, that same $100 grocery trip might cost $105 this month. Retail investors watch CPI closely because high inflation can hurt stock prices, while low inflation might signal economic slowdown.