Guide
A constant inflation rate is not CPI
The inflation tool is an exponent you typed. Official baskets, revisions, and real vs nominal are something else.
What the calculator actually does
The inflation tool is a constant-rate exponent: future value = amount x (1 + r) ^ years. Negative years run the same formula backward. There is no country series, no CPI vintage, no shelter interpolation. You type a rate. We raise it to a power.
That is useful as a sanity check on a cash pile or a long-dated target. It is not a substitute for an official statistics lookup, and it is not your personal inflation. Rent, healthcare, and a grocery mix will not track the number you typed.
CPI is a basket, not a rate you picked
Headline CPI is a weighted basket that statistical agencies revise. Housing is large. Energy is noisy. Quality adjustments and substitution make 'the' inflation rate a constructed object, not a price you can click on a terminal the way you click SPY.
Core, median, trimmed-mean, and PCE are different cuts of the same world. A brief that says 'inflation cooled' may mean headline, may mean core, may mean a forecast. The calculator cannot choose among them. If you plug 3% into it because a headline said 3%, you have already flattened the story.
A worked example
10,000 today at 3% for 20 years is about 18,061 of future nominal dollars if the rate is really 3% every year. Turn it around: 10,000 from 20 years ago at the same 3% is about 5,537 in today's buying power under that toy path.
Now change the assumption, not the formula. 2% for 20 years is about 14,859. 5% is about 26,533. The tool is good at showing that gap. It is bad at telling you which path your city, your rent, or the next decade will take. Sequence matters: ten years at 1% then ten at 5% is not the same as 3% the whole way, even if the average looks close.
Real vs nominal on this desk
The compound and ETF calculators grow a nominal pile. The inflation tool shrinks buying power (or inflates a past amount). They do not talk to each other. A 7% compound path minus 3% inflation is not a real return in the tool; you have to do that subtraction in your head, and even then you have assumed both rates are flat.
Yields on the strip (IEF as a duration proxy, not the 10-year) are also nominal. A brief about 'real yields' is a different object. Do not paste IEF's delayed percent change into this calculator.
When not to use it
Hyperinflation, currency collapses, and administered prices. Wage contracts with specific CPI clauses - use the clause. Tax brackets and capital-gains indexation, which are legal definitions, not exponents. Any plan that needs a fan chart rather than a single r.
If you want a desk habit: pick a rate, write it down, and treat the output as 'if this were true,' not 'this will be true.' Then get back to the wire.
Open the calculator: Inflation. Related: compound interest, ETF proxies.