Will the 12-month percentage change in CPI-U in December 2036 be above 2.5%

30-day trend

Analysis

This market assesses whether the 12-month inflation rate measured by the Consumer Price Index for All Urban Consumers will exceed 2.5% in December 2036—roughly a decade away. The 95% probability reflects market participants' expectation that inflation will remain above this threshold over the next ten years. The assessment balances two competing considerations: historical inflation patterns typically hovering around or above 2% in developed economies, and the possibility of deflationary shocks or sustained below-target periods. The related contract chain shows declining probabilities for higher thresholds (37% for above 2.5% by December 2027), suggesting markets expect closer-to-target inflation in the nearer term but reversion to higher levels by 2036. Resolution will depend on Federal Reserve policy, global economic conditions, energy prices, and labor market dynamics over the full decade. The December 2036 CPI release, typically arriving in mid-January 2037, will provide the definitive outcome.

• ›The current spread between near-term inflation expectations (37% above 2.5% by Dec 2027) and long-term expectations (95% above 2.5% by Dec 2036) indicates markets anticipate mean reversion to higher inflation over time
• ›Historical CPI-U averages have typically ranged 2-3% annually since 2000, with structural factors like wage growth and asset prices potentially supporting inflation above 2.5% over a decade
• ›Federal Reserve policy and target inflation rate of 2% creates a lower anchor, but inflation has consistently overshot this target across most developed economies in recent years
• ›Long-term inflation expectations extracted from Treasury breakeven rates and energy futures will be critical inputs for pricing this contract as it approaches resolution
• ›A sustained period of deflation or ultra-low inflation (under 2%) would be required to move this probability significantly lower, requiring either demand destruction or technological disinflation

What moved the line

• Aug 18Above 0.5%↓37pp67→30¢ · Kalshi
• Aug 20Above 1.5%↓31pp36→5¢ · Kalshi
• Aug 20Above 0.5%↓25pp30→5¢ · Kalshi
• Aug 20Above 2.0%↓23pp30→7¢ · Kalshi
• Aug 21Above 3.5%↓21pp23→2¢ · Kalshi

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