| Actual | Previous | |
|---|---|---|
| Month over Month | -0.23% | 0.46% |
| Year over Year | 1.25% | 1.60% |
Highlights
Taiwan's headline consumer price index fell 0.23 percent on the month in September after advancing 0.46 percent in August, with the year-over-year increase slowing from 1.60 percent to 1.25 percent. This moderation in price pressures was largely driven by vegetable prices, which fell sharply over the month after severe weather has pushed them sharply higher previously. Core CPI, which excludes fruits, vegetables, and energy prices, fell 0.12 percent on the month in September, little changed from a drop of 0.12 percent in August, with the year-over-year increase slowing from 1.74 percent to 1.62 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 last month, in line with the consensus forecast for no change. This rate has been on hold since an increase of 12.5 basis points in March 2024 took the rate to its highest level since 2008.
The Central Bank of the Republic of China (Taiwan) left its main policy rate unchanged at 2.00 percent at its quarterly policy meeting last month, in line with the consensus forecast for no change. This rate has been on hold since an increase of 12.5 basis points in March 2024 took the rate to its highest level since 2008.
Definition
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.
Description
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.
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.
