- Traders on prediction market platform Kalshi think there's less than a 1-in-3 chance that inflation will rise above 4.2% in 2026.
- The May Consumer Price Index report showed annual inflation running at a 4.2% rate.
- Inflation forecasts have retreated as energy prices, which accounted for 60% of the rise in prices from April to May, have tumbled following the partial reopening of the Strait of Hormuz.
The next CPI report, measuring inflation in June, is due for release by the Bureau of Labor Statistics (BLS) on July 14.
The contract on Kalshi asks if traders think CPI will deliver a reading above various percentages in 2026. Contracts are resolved using the CPI data released each month by the BLS.
The inflation outlook has eased primarily due to recent declines in its main driver: energy prices. After
shooting higher after the start of the U.S.-Iran war in late February and the subsequent closure of the Strait of Hormuz, gas and oil prices have started to retreat after the partial reopening of the waterway.
Average national gasoline prices as of Wednesday stood at $3.84, according to AAA, down from more than $4.50 at their peak. That reflects weaker U.S. crude oil prices, which have
fallen below $70 per barrel for the first time since the war began.
Energy prices in May
accounted for 60% of the CPI's month-over-month increase.
Now the decline in gas prices is leading Kalshi traders to think that CPI in June will show prices falling by 0.2% compared with May, in-line with Wall Street consensus estimates.<small>Source: CNBC</small>
Business
Inflation peaked in May as energy prices fell in June, Kalshi traders think
CNBC
July 01, 2026
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