Traders on the CFTC-regulated prediction market Kalshi expect headline CPI to reach a median of 3.6% by December 2026. This projection remains significantly higher than the Federal Reserve's 2% inflation target.
Current market data shows a greater than 90% probability that headline CPI will stay above 3.4% for December 2026. The likelihood of the index exceeding 3.5% is estimated at 64%, while a reading above 4.0% is priced at 21%.
Expectations for core CPI, which excludes food and energy, are lower at approximately 2.7%. The disparity between headline and core figures suggests that food and energy costs continue to drive inflation trends.
Earlier this year, market expectations were more volatile. Following a 3.8% CPI print in April, traders anticipated inflation could peak at 4.8% in May. However, lower energy prices subsequently moderated these forecasts.
Kalshi contracts settle based on official data from the Bureau of Labor Statistics. The platform is regulated by the Commodity Futures Trading Commission, providing an alternative data source for investors alongside bond market pricing and economist surveys.
