Kalshi's prediction market has significantly outperformed Wall Street consensus in forecasting the Consumer Price Index (CPI), according to a report by Kalshi Research. The market-based forecasts demonstrated a 40.1% lower average absolute error compared to consensus estimates. Notably, during major inflation shocks, Kalshi's error rate was 50% lower one week before data release and 60% lower the day before.
The report also noted that when Kalshi's predictions diverged from consensus by more than 0.1 percentage points, the likelihood of a shock increased to 81.2%. These findings underscore the potential of prediction markets not only for CPI forecasting but also for predicting Bitcoin prices in volatile market conditions.
Kalshi Prediction Market Outperforms Wall Street in CPI Forecasts
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