Inflation peaked in May as energy prices fell in June, Kalshi traders think
Red meat is displayed at a grocery store in Brooklyn, New York, on May 12, 2026.
Spencer Platt | Getty Images
With oil and gas prices falling following the detente between the US and Iran, prediction market investors now think inflation has peaked.
Speculators on prediction market platform Kalshi think there is only a 28% chance that headline inflation this year will rise above the 4.2% annual rate of increase in the Consumer Price Index in May.
The next CPI report, which measures inflation in June, is expected to be released by the Bureau of Labor Statistics (BLS) on July 14.
The Kalshi contract asks whether investors think the CPI will deliver a reading above various percentage points in 2026. Contracts are analyzed using CPI data published monthly by the BLS.
The inflation outlook has eased mainly due to recent declines in energy prices, the main driver of inflation. Gas and oil prices, which rose after the start of the US-Iran war in late February and the subsequent closure of the Strait of Hormuz, began to retreat after the partial reopening of the waterway.
Average national gasoline prices on Wednesday fell to $3.84 from $4.50 at their peak, according to AAA. This reflects weakening US crude oil prices, which fell below $70 a barrel for the first time since the war began.
In May, energy prices accounted for 60% of the increase in CPI compared to the previous month.
The decline in gas prices leads Kalshi traders to expect June CPI prices to fall by 0.2% compared to May; This is in line with Wall Street’s consensus estimates.
