World Economy

Prediction Markets Signal Inflation Peak, But Elevated Pressures to Persist Through 2026

Traders betting on inflation outcomes see limited probability of price pressures reaching new highs in 2026, according to activity on prediction markets. Speculators place odds at just under one-in-three that inflation will hit fresh peaks during 2026, suggesting most believe recent gains represent a ceiling for the cycle.

Core inflation, which excludes volatile food and energy components, is expected to hold steady near 2.4 percent year-over-year. However, market participants assign only a 6 percent chance that core inflation will fall below 2 percent. This represents the last level observed before the 2021 surge. The outlook reflects trader conviction that underlying price pressures will remain sticky despite forecasts for moderation.