The Consumer Price Index (CPI) is a key economic tool used to measure inflation and fluctuations in the cost of living by tracking a basket of basic goods and services such as housing, transportation, and food. The index is calculated in three ways: Laspeyres (weighted by quantities in the base period), Paasche (weighted by current quantities), and Fischer (geometric average of the two methods). Results are expressed as a percentage relative to a base period (such as 1984, when the index was 100). The CPI is closely related to the inflation rate, which is calculated by comparing the change in CPI between two periods. This data is used by central banks to adjust monetary policies, such as interest rates, to achieve economic stability (usually with an inflation target of 2-3%). A CPI that is higher than expected indicates high inflation, which may prompt banks to raise interest rates and strengthen the currency, while a CPI that is lower may weaken it. In financial markets, the release of CPI reports is an influential event, as it compares actual output with expectations and the past. Unexpected results cause rapid volatility; for example, if the CPI exceeds expectations (such as rising to 1.5% instead of 1.3%), markets may buy the currency expected to raise interest rates. This indicator is used in news trading strategies to seize short-term opportunities, especially in currency pairs and stocks sensitive to inflation.