Impact of CPI

Consumer Price Index (Consumer Price Index), abbreviated as CPI, is to reflect the price of goods and services related to the lives of residents statistical price change indicators, usually as an important indicator to observe the level of inflation.

CPI and the stock market is not necessarily linked, but the CPI price index if the rate of increase is too high, the central bank will raise interest rates, interest rates will be raised to curb the liquidity of funds, the stock market is the need for funds, the liquidity of funds down the stock market will fall.

And the level of interest rates is a measure of the price-to-win ratio of a stock. The price-to-earnings ratio is a valuation of a stock that is generally inversely proportional to a bank's one-year time deposit rate