Consumer Price Index (CPI)
The CPI measures the average price change of a basket of goods and services. It is the backbone of the inflation history dashboard and the most common measure of living costs.
Year-over-Year (YoY) Inflation
YoY inflation compares the current CPI reading with the same month or year a year earlier, highlighting short-term changes. It eliminates seasonal fluctuations.
Rolling Average
A rolling average smooths inflation across a fixed window, such as five years, to reduce noise from short-lived spikes. It reveals the underlying trend.
Peak Inflation
Peak inflation marks the highest recorded rate in a period. Identifying peaks helps stress-test financial plans against worst-case scenarios.
Median Inflation
Median inflation is the middle value when yearly rates are ordered. It resists distortion from extreme outliers, offering a "typical" inflation figure.
Volatility Band
A volatility band captures the range between high and low inflation readings, signalling how unstable prices were. High volatility makes planning harder.
Real Rate Benchmark
The real rate benchmark subtracts average inflation from investment returns, guiding portfolio choices. It tells you what return you need to beat.
Disinflation
Disinflation occurs when inflation slows but remains positive (e.g., dropping from 6% to 4%). Spotting disinflation phases reveals when price pressures cooled.
Hyperinflation
Hyperinflation refers to extremely rapid price increases (often >50% per month). Identifying such periods helps contextualise currency reforms or economic crises.
Base Effect
The base effect explains how a low or high prior-year CPI influences current readings. Understanding it prevents misinterpreting sudden jumps or drops.