Traders on the prediction market platform Kalshi believe that inflation likely peaked in 2026, with expectations for the September consumer price index (CPI) to show a 3.6% year-over-year increase, matching the FactSet consensus estimate. This figure represents an uptick from the 3.4% increase recorded in August.
Despite this peak, traders assign nearly a one-in-three probability that inflation will reach new highs by 2026. The previous peak was 4.2% in May. Additionally, core inflation, which excludes volatile food and energy prices, is anticipated to remain steady at 2.4% year-over-year, also aligning with economists' forecasts.
However, traders foresee core inflation staying elevated throughout the remainder of 2026, with only a 6% chance of it dropping below 2.2% this year. This level has not been seen since before the inflation surge that began in 2021.
The contracts on Kalshi allow traders to speculate on whether the CPI will exceed certain thresholds for September and in 2026, with outcomes determined by official data from the Bureau of Labor Statistics. The ongoing inflation concerns could have significant implications for monetary policy and investment decisions moving forward