Kalshi: The prediction market outperforms Wall Street consensus expectations in inflation forecasting.

On December 22, according to Coindesk, a study from the prediction market platform Kalshi found that prediction markets outperform Wall Street consensus expectations in inflation forecasting. Over a data set spanning 25 months, its average error was 40% lower than the consensus forecast. The study pointed out that the advantage of prediction markets lies in their ability to aggregate diverse information from numerous traders based on economic incentives, creating a “wisdom of the crowd” effect that allows for more responsive reactions to changing environments. These findings suggest that market-based predictions can serve as a valuable supplementary tool for institutional decision-makers, especially during periods of high uncertainty. Kalshi discovered that by comparing inflation forecasts on its platform with Wall Street consensus expectations, market-based traders exhibited higher accuracy in their predictions than traditional economists and analysts over the 25-month observation period, with this advantage being particularly significant during economic fluctuations. Specifically, the study found that from February 2023 to mid-2025, the prediction market's estimates of year-on-year changes in the Consumer Price Index (CPI) had an average error 40% lower than the consensus forecast. When actual data deviated significantly from expectations, the advantages of prediction markets became even more pronounced, with accuracy exceeding consensus expectations by as much as 67%.