The Consumer Price Index (CPI) is an important indicator of inflation and can influence market movements. A 3% increase in the CPI suggests that prices for goods and services have risen by that amount over a certain period. In response to this rise in inflation, the market may experience some effects. Firstly, higher inflation can lead to expectations of interest rate hikes by central banks to control inflation. This could result in increased borrowing costs, impacting industries sensitive to interest rates such as housing and automotive sectors. Additionally, investors might adjust their portfolios to account for the inflationary environment. They may favor investments that provide protection against inflation, such as commodities like gold or companies with pricing power. Conversely, se