NEW YORK, January 3, 2026, 04:56 ET
Kalshi Inc. is stepping up efforts to turn inflation forecasts into tradable contracts, drawing a new wave of scrutiny over whether prediction-market prices belong in macroeconomic analysis. In a Bloomberg Opinion column published Friday, columnist Aaron Brown said Kalshi had publicized a study claiming more accurate inflation forecasts than Wall Street’s consensus, while leaving open key questions about the benchmark and how a single forecast is derived from market bets. 1
The debate is landing ahead of the next U.S. inflation report, a release that can shift expectations for Federal Reserve policy and move stocks and bonds. The Bureau of Labor Statistics has scheduled the December 2025 Consumer Price Index report for Jan. 13. 2
It also comes as prediction markets — platforms where users trade contracts that pay out if a specific event happens — have surged in activity and visibility. They peaked in December at over $4 billion in weekly trading volume, DL News reported, as crypto firms such as Coinbase and Crypto.com moved in alongside leaders Kalshi and Polymarket. “Prediction markets should be a multiple of their current size,” said Dustin Gouker, founder of gambling consultancy Closing Line Consulting, in an interview with DL News. 3
On Kalshi, traders buy “yes” or “no” contracts tied to a CPI threshold or range and receive a payout if the official data lands where they bet. The contract prices act like a crowd-sourced probability, with higher prices reflecting higher confidence in an outcome.
Kalshi said in a Dec. 22 post announcing a research arm that an in-house study found its inflation forecasts outperformed Wall Street consensus forecasts by 40% and matched or beat consensus on 85% of inflation releases when measured one week ahead. It said the market performed best during “shock” periods, reporting a 50% lower mean absolute error — the average size of the miss — than the Wall Street benchmark. 4
Whether those prices can be treated as a clean forecast hinges on transparency and liquidity — the amount of money available to trade. Thin markets can jump on small orders, while hedging demand can pull prices away from a “most likely” outcome.
Cryptopolitan argued on Friday that Kalshi has not provided enough detail for outsiders to evaluate its forecasting claims, including what “Wall Street consensus” it is using and how it translates trading prices into a single inflation number. The piece said stitching together multiple binary CPI bets can produce an implied probability distribution that is awkward to summarize with a single “best guess” forecast. 5
A Dec. 30 post on FlowingData said Kalshi’s revenue is overwhelmingly tied to sports markets, a backdrop that complicates its push to be taken seriously in economic forecasting. The site cited a Financial Times report saying Kalshi’s model looks similar to gambling, which is regulated differently across most U.S. states. 6
More competition could deepen liquidity and make prices harder to move with small bets, which proponents say would improve signal quality. It could also intensify fights over whether these products are financial derivatives or de facto betting.
Kalshi says it is overseen at the federal level by the Commodity Futures Trading Commission, the U.S. derivatives regulator, rather than by state gambling authorities. 7
Supporters of prediction markets say prices can aggregate scattered information faster than surveys of economists, especially around surprises. Skeptics counter that comparisons can be skewed by how benchmarks are chosen and by who is actually trading the contracts.
