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Core CPI |

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| This article is part of WikiProject Definitions. Consider editing to improve it. View articles referencing this definition. |
Core Consumer Price Index (CPI) is equal to CPI minus energy and food prices and is used to measure core inflation. The reason behind excluding energy and food prices is because the prices of these goods can be very volatile. As a result, such wide fluctuations would unfairly distort the measure of inflation.[1]
Why is it important?The Federal Reserves uses Core CPI to decide whether they should change Fed Funds rate or not. By excluding volatile energy and food prices, the Fed can get have a better idea if the rising prices of goods and services are caused by core inflation or by the volatile energy and food prices.[2]
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