Forecasters See 3.6% Inflation. Strip Out Food and Fuel, It's 2.5%

Brad Roth
October 14, 2026

TL;DR

• Economists expect September CPI at 3.6% and core at 2.5%. Brent at $106.60 is the loud part of that gap.

• Treasury bills are 40.2% of the even-weight strategy, and the three-month yields 4.175%. That's above both forecasts.

• Bank of America's profit fell 17% on a regulatory penalty, but net interest income rose 8%. Financials are 20.1% of the even-weight strategy, and Morgan Stanley reports this morning.

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Market Pulse

Futures as of 7:12 AM ET, commodities as of 7:09 AM ET, currencies as of 7:06 AM ET, yields as of 7:14 to 7:25 AM ET

• S&P 500 futures are up 0.13% at 7,866.25.

• Nasdaq 100 futures are down 0.19% at 30,731.50.

• Dow futures are up 0.29% at 52,084.00.

• Russell 2000 futures are up 0.18% at 2,805.20.

Tuesday went nowhere. The S&P 500 finished down 0.01%. The Dow and the Nasdaq 100 each lost 0.33%, and small caps 0.43%. Five of eleven sectors rose. Energy led at 1.80% and closed a nickel under its 52-week high. Healthcare finished last, down 1.35%.

• Brent is $106.60, up 0.86%. West Texas is $95.68, up 1.64%.

• Gold is $4,159.70, down 0.42%. Silver is down 1.46% at $58.66.

• The three-month bill yields 4.175%, the two-year 4.772% and the ten-year 5.201%, down 1.6 basis points.

• Euro/dollar is 1.1189. The dollar buys 158.48 yen. Volatility futures are 16.63. Bitcoin closed Tuesday near $83,460.

• CPI lands at 8:30. The Fed's Beige Book follows at 2:00, with Barkin and Goolsbee speaking this afternoon.

THOR Risk Gauge

Slightly bullish. The index strategy is fully invested across the three major American indexes. The even-weight strategy holds 60.4% in three sectors and 40.2% in Treasury bills. Yields are slightly lower and futures are mixed. Brent above $106 and a Fed that keeps talking about hikes keep it from leaning further.

The THOR View

This morning's CPI has two numbers, and they tell different stories. Economists expect headline inflation at 3.6% for September, up from 3.4%. Core, which drops food and energy, is forecast at 2.5%. That's a gap of 1.1 points, and fuel is the loud part of it. Brent has sat above $100 every morning for a week. Strip that out and prices are rising at a pace the Fed would almost call normal.

The Fed watches core, but markets trade the headline. A 0.6% monthly headline jump is already in the forecast. The surprise risk sits in core, forecast at 0.2% for the month against 0.3% in August. A soft core gives the bond market room to breathe after the ten-year touched 5.35% last week. A hot one backs Waller and the officials calling for more hikes.

Treasury bills do the quiet work in the even-weight strategy. They're 40.2% of the portfolio, and the three-month yields 4.175%. That's 0.6 points above the headline forecast and 1.7 above core. Bills roll every few weeks, so if CPI pushes the Fed to hike, that yield climbs with it. Higher rates can hurt a stock portfolio. In bills, they show up as income.

Financials picked up a clean read on the core business this morning. Bank of America's profit fell 17% to $6.9 billion. A $1.2 billion regulatory penalty did the damage, according to CNBC. Underneath it, net interest income rose 8% to $16.4 billion. The gap between the two-year and the ten-year is about 43 basis points, and banks earn on that gap. Financials are 20.1% of the even-weight strategy. Morgan Stanley reports before the open.

Technology rounds out the equity side at 20.2%, the largest of the three sectors by a hair. It slipped just 0.04% Tuesday while chip stocks fell 0.49%. Long rates matter most here, which makes this morning's core number the one to watch.

Signal Watch

THOR Index Rotation — As of 10/13/26

Fully invested in three near-equal pieces. The S&P 500 closed Tuesday within half a percent of its 52-week high. All three weights sit within six tenths of a point of each other.

THOR Low Volatility — As of 10/13/26

Three sectors within two tenths of a point of each other, and 40.2% in bills. Healthcare gave back 1.35% Tuesday after Monday's gain and sits about 4% under its 52-week high.

THOR AdaptiveRisk Dynamic — As of 10/13/26

The mix runs 45.8% equity, 18.6% alternatives, 14.9% commodity, 14.4% specialty currency and 6.3% fixed income. The energy fund rose to 7.0% on Tuesday's 1.80% sector gain. The interest-rate hedge is the piece built to gain if a hot core number pushes long yields higher.

One Thing to Watch

Core CPI at 8:30, forecast at 0.2% for the month. A 0.3% or higher read puts more hikes back on the table before the Fed meets October 28. That moves the yield on the 40.2% of the even-weight strategy sitting in bills, and it tests technology, the sector most exposed to long rates.

Brad Roth / CIO, THOR Financial Technologies

This content reflects the opinions, analyses, and research of THOR Financial Technologies as of the date published. It is provided for informational and educational purposes only and does not constitute investment advice and should not be relied upon as the basis for any investment decision. Past performance doesn't guarantee future results, and all investments involve risk. For more information, please go to: thorft.com