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CPI Is Back On Even If DC Isn’t And You Need to Prepare Your Portfolio

BLS will drop September inflation. Here’s what to watch and how to position calmly.

Author

Noah Zelvis
October 12, 2025

The lights are still off in Washington, but the inflation scoreboard is coming back.

The government is recalling key BLS staff to publish the September CPI so Social Security’s cost-of-living adjustment can be set on time.

Let’s keep it simple and helpful for your actual money.

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Why This CPI Drop Matters More Than Usual

  • It unlocks COLA. Social Security needs Q3 inflation to set 2026 benefits by Nov 1. No CPI = no COLA math. Now that staff are back as needed, the report should land this month.

  • The Fed is split. September minutes showed a narrow majority leaning toward more cuts this year, but a sizable minority wanted to pause. With most data frozen by the shutdown, this CPI could carry extra weight into the Oct 28–29 meeting.

  • Markets are flying VFR. With jobs and other reports delayed, one clean CPI print can swing rate odds, yields, and factor leadership fast. Expect bigger-than-usual reactions.

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What I’ll Watch Inside CPI (and why you should too)

  • Core services ex-housing (a.k.a. supercore): The best pulse on sticky inflation. If it cools, the two more cuts camp gains confidence.

  • Shelter: It lags reality, but it’s still a third of CPI. Any sign of deceleration helps the case for a gentler path on rates.

  • Auto insurance and medical: Both have punched above their weight this year. If they stay hot, inflation is stuck near 3% chatter will get louder.

  • Goods vs services: Tariff noise tends to hit goods. If goods stay tame while services cool, the soft landing with trims”narrative holds.

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What It Means For Your Rates

  • Mortgages: They follow longer Treasury yields more than the Fed’s overnight rate. A cooler CPI can nudge yields down and quotes lower, but not in a straight line. Have docs ready; lock dips, don’t chase bottoms.

  • Cards/HELOCs: Expect modest APR relief a statement or two after cuts. Use the wiggle room to pay down, not pad balances.

  • Savings: High-yield accounts drift lower as cuts add up. Consider a small ladder in Treasuries to defend yield without losing flexibility.

The Fed’s Mindset

Policymakers agree jobs have cooled; they disagree on how fast to ease given inflation near 3%. Powell keeps repeating no risk-free path. If CPI behaves, the modestly restrictive stance can slide lower. If CPI reaccelerates, expect more wait and see, even with the shutdown fog.

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Your Simple Game Plan

  • Favor steady cash machines with pricing power. If CPI stays sticky in pockets, these names pass through costs without losing share.

  • Lean domestic and USMCA-friendly. Tariff frictions are still a thing; cleaner supply chains keep margins cleaner.

  • Stage buys. With data sparse, one line in CPI or one sentence in a Fed speech can whipsaw prices. Add in slices.

  • For retirees: Don’t pre-spend a COLA. Let the official CPI land, then adjust your 2026 budget. If you need a placeholder, assume modest and leave cushion.

Quick Takeaways

  • BLS will publish September CPI despite the shutdown, unlocking Social Security COLA math.

  • Fed minutes show real division; this CPI will carry extra weight into late-October.

  • Expect choppier moves on one data point; plan entries, don’t chase.

  • Prefer domestic operators with pricing power and clean balance sheets.

Top Picks

Builders FirstSource (NYSE: BLDR)

Lower rates help housing demand, and even a small dip in mortgage quotes can thaw quick-close activity and remodel intent.

BLDR sells into that pivot with value-added components (trusses, wall panels) and software-enabled takeoffs that improve builder efficiency. 

Domestic manufacturing limits tariff headaches, and pricing is more about local supply/demand than seaborne surprises.

If shelter inflation cools while rates ease, single-family starts typically lead, and BLDR’s operating leverage shows up quickly.

Watchlists love the ticker; fundamentals love backlog quality, mix shift to higher-margin manufactured products, and disciplined capital returns.

Progressive (NYSE: PGR)

Auto insurance has been a CPI headline hog, but for PGR it’s margin oxygen. The company repriced aggressively, restored underwriting results, and benefits from a fat fixed-income book that still earns attractive yields even if the Fed trims more.

Claims inflation moderating at the margin + rate adequacy + policy growth is PGR’s preferred cocktail. 

Tariffs don’t move this ship. Execution, loss trends, and investment income do. In a world where parts of CPI are sticky, owning the beneficiary of that stickiness is a tidy hedge.

Bonus: it’s less macro-sensitive than typical cyclicals.

Quanta Services (NYSE: PWR)

Grid hardening, transmission buildouts, data-center power, and renewables interconnects don’t pause for a shutdown.

PWR sits at the center of that spend with multi-year backlogs, union labor depth, and execution that has earned it pricing power.

Tariff exposure is minimal, and rate cuts actually help customers finance projects. 

If CPI cools and the Fed eases, discount rates fall and multi-year infrastructure cash flows get a valuation tailwind.

If CPI runs a touch hot, utilities and mission-critical projects still proceed. That’s what all-weather looks like in industrials.

Extra Space Storage (NYSE: EXR)

Life-event demand (move, marriage, downsizing) keeps storage resilient when the economy wanders.

EXR’s national footprint, dynamic pricing, and high-margin model turn small upticks in occupancy into outsized cash flow.

A gentler rate path eases refi math and development returns; tariff noise barely touches the P&L. 

If shelter disinflates over the next year, rent growth slows in housing, but turnover tends to lift storage usage.

This is a quiet compounding story that plays well whether CPI lands at 2-something or clings near 3.

Risk Management

  1. Add in thirds around the CPI release and the post-print rate odds shuffle.

  2. Right-size rate-sensitives (builders, REITs) if CPI surprises hot; keep dry powder to buy the next dip.

  3. Keep a bond ladder with some intermediate rungs. If cuts accelerate, you’ll like the duration; if not, you’ve still got liquidity.

Bottom line: the shutdown muted the orchestra, but CPI’s about to solo. Let the number sing, avoid impulsive moves, and stick with businesses that earn through the noise.

That’s it for today’s edition—thanks for reading! Reply to this email with any feedback or let me know which macro trends or markets you’d like me to cover next.

Best Regards,
—Noah Zelvis
Macro Notes