Current Market Outlook

The prediction market currently prices the "CPI core month-over-month in Sep 2026? (Exactly 0.5%)" contract at 50% on Kalshi. This price indicates the market views the probability of the September 2026 core CPI print landing precisely at 0.5% as a coin flip, representing maximum uncertainty. It is essentially the baseline for a central inflation outcome, equidistant from pricing in a clear hot or cold print.

Key Factors Driving the Odds

The 50% price reflects the extreme difficulty of pinpointing an exact inflation print over two years into the future. The Federal Reserve's target for core PCE inflation is 2.0% annually, which translates roughly to a 0.17% average monthly increase. A 0.5% monthly core CPI print is historically elevated, nearly triple that implied steady-state rate. The market's even odds suggest it sees two balanced forces: structural disinflation from potential policy success versus persistent pressures from services, housing, or wages that could cause periodic spikes. Current volatility in month-to-month data, as seen in recent 0.4% and 0.3% prints, makes any single-month outcome years out highly speculative.

What Could Change These Odds

The odds will remain anchored near 50% until concrete data and policy paths for 2026 emerge. Key catalysts include the Federal Reserve's forward guidance in late 2025 and the first inflation prints for that year. A sustained series of 0.2% or lower monthly readings through 2025 would likely push odds for a 0.5% spike in 2026 significantly below 50%. Conversely, a reacceleration of inflation forcing the Fed to maintain restrictive policy longer could increase the probability of volatile, higher monthly prints like 0.5%. The market will begin to price this specific outcome more decisively once the 2026 economic forecast, particularly the output gap and labor market projections, comes into sharper focus.