Core Inflation

Core inflation is a measure of the long-term increase in prices for goods and services, excluding volatile items like food and energy. Because these items can fluctuate significantly due to factors such as weather or geopolitical events, removing them helps provide a clearer picture of underlying inflation trends. This helps policymakers, like central banks, make informed decisions about interest rates and monetary policy to maintain economic stability. Essentially, core inflation indicates how prices are rising on most everyday goods and services when temporary price swings are filtered out.