Headline Inflation

Headline inflation is a measure of the total price inflation within an economy and is affected by areas of the market which may experience sudden inflationary spikes such as food or energy. It does not include asset inflation.

Headline inflation numbers are paid attention to by the market, especially during critical periods when the Federal Reserve is tightening or turning from easing to tightening, as a headline inflation reading above expectations may lead to expectations of more tightening.

Some investors believe headline inflation understates true inflation and believe that true inflation is much higher than reported.

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