Taiwan's headline consumer price index rose 0.10 percent on the month in November after an increase of 0.25 percent in October, with the year-over-year increase picking up from 1.69 percent to 2.08 percent. Fruit prices rose strongly on the month after extreme weather events, but fuel prices fell. Core CPI, which excludes fruits, vegetables, and energy prices, fell 0.02 percent on the month in November after increasing 0.47 percent in October, with the year-over-year increase picking up from 1.64 percent to 1.74 percent.

The Central Bank of the Republic of China (Taiwan) left its main policy rate unchanged at 2.00 percent at its quarterly policy meeting mid-September. Officials remain confident that price pressures will moderate in the near-term, revising their forecast for annual headline inflation in 2024 from 2.12 percent to 2.16 percent and their forecast for annual core inflation from 2.00 percent to 1.94 percent. They expect further moderation in 2025, forecasting headline CPI inflation to fall to 1.89 percent and core CPI inflation to fall to 1.79 percent. Reflecting this assessment, officials concluded that policy settings remained appropriate. The next policy meeting will be held later his month.

The Consumer Price Index (CPI) is a measure of the average price level of a fixed basket of goods and services purchased by consumers. Annual changes in the CPI represent the rate of inflation.

An investor who understands how inflation influences the markets will benefit over those investors that do not understand the impact. Inflation is an increase in the overall prices of goods and services. The relationship between inflation and interest rates is the key to understanding how indicators such as the CPI influence the markets and your investments.

Inflation (along with various risks) basically explains how interest rates are set on everything from mortgages and auto loans to government securities. As the rate of inflation changes and as expectations on inflation change, the markets adjust interest rates. The effect ripples across stocks, bonds, commodities and your portfolio, often in a dramatic fashion.

By tracking inflation, whether high or low, rising or falling, investors can anticipate how different types of investments will perform. Over the long run, the bond market will rally (fall) when increases in the CPI are small (large). The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.