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Trading Glossary

Inflation

The Inflation is defined as the rise of the overall price of the goods and service in the certain period of time. The Purchasing power of this is the power of the each unit of the currency decline. Inflation is usually measured using a consumer price index (CPI), which tracks the cost of a basket of consumer goods and services.Changes in inflation can have a major impact on financial markets, as they affect purchasing power and can bring about change in a central bank’s monetary policy.