This study investigates the impact of inflation on financial market performance using data from the Consumer Price Index (CPI), Nasdaq index, and S&P 500 index from 2000 to 2023. Correlation analysis and benchmark regression are employed to assess the relationship, with temporal heterogeneity analysis used to examine the impact across different time periods (pre- and post-2007 financial crisis and pre- and post-COVID-19 pandemic). The study finds a generally positive impact of CPI on the financial market, but this relationship varies across time, showing a negative correlation with the Nasdaq before the 2007 crisis and a positive correlation afterward, before becoming less substantial after the COVID-19 pandemic.

Qingren (Peter) Liul