Kalshi Rate Forecasts Match Fed Survey Accuracy, Analysis Finds

Prediction market data from Kalshi shows stronger accuracy than traditional futures and survey forecasts on key macro trends.

Prediction markets are gaining ground in macro forecasting. Federal Reserve economists report that Kalshi’s rate contracts have closely mirrored U.S. monetary decisions since 2022. In several areas, its pricing data outperformed futures markets and economist surveys. Findings place regulated prediction platforms at the center of discussions on how markets interpret economic signals.

Fed Economists Point to Kalshi as Reliable Macro Forecast Tool

Federal Reserve economists took a close look at how well prediction markets forecast the economy. In a paper titled “Kalshi and the Rise of Macro Markets,” regulated data from Kalshi was analyzed.

Researchers Anthony M. Diercks, Jared Dean Katz, and Jonathan H. Wright conducted the analysis. They compared forecasts from the CFTC-regulated prediction market Kalshi with Fed funds futures and surveys from professional economists.

Results show that Kalshi has correctly predicted every interest rate decision made by the Federal Open Market Committee since 2022. Its rate forecasts had smaller errors than those based on Fed funds futures. Economist surveys were also less accurate across several key economic measures.

Kalshi’s CPI forecasts were more accurate than Bloomberg’s projections. The accuracy even extended to unemployment and GDP estimates. Prices on Kalshi update in real time, showing shifting probabilities and not a fixed forecast.

The authors also noted that prediction markets react fast to economic data and central bank signals. Traders reprice contracts as news breaks, reflecting changing expectations. Such high-frequency pricing offers policymakers an additional benchmark when assessing market sentiment.

Wall Street Voices Welcome Fed Paper on Prediction Market Accuracy

Market participants reacted positively and welcomed the paper’s findings. Kalshi co-founders Tarek Mansour and Luana Lopes Lara described the results as “fantastic.” Both said regulated prediction markets have proven useful for researchers and policy observers.

Support also came from Matt Huang, founder of Paradigm. He pointed out that Kalshi’s forecast errors have been lower than those of futures markets, including stronger calls on recent U.S. inflation data.

Regulatory backing remains central to the debate. Michael Selig, Chair of CFTC, has argued that prediction markets fall under federal oversight. The agency filed an amicus brief in support of jurisdiction over platforms such as Polymarket and Kalshi.

At the same time, growing academic support may influence policymakers’ views of market-based forecasting tools. Evidence suggests prediction markets can serve as a real-time complement to surveys and futures pricing.

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