Red meat on display at a grocery store in Brooklyn, New York, May 12, 2026.
Spencer Pratt | Getty Images
Prediction market traders believe inflation has peaked as oil and gas prices fall amid easing tensions between the United States and Iran.
Speculators at prediction market platform Kalsi believe there is only a 28% chance that this year’s headline inflation rate will exceed May’s annual rise in the consumer price index of 4.2%.
The next CPI report, which measures June’s inflation rate, is scheduled to be released by the Bureau of Labor Statistics (BLS) on July 14.
Kalsi’s contract asks whether traders believe the CPI will be higher than various percentages in 2026. Contracts are settled using CPI data released monthly by the BLS.
The softening of the inflation outlook is largely due to the recent decline in energy prices, a key driver. Gas and oil prices, which soared after the start of the U.S.-Iranian war in late February and the subsequent closure of the Strait of Hormuz, have begun to fall after the waterway was partially reopened.
The average price of gasoline nationwide as of Wednesday was $3.84, down from a peak of more than $4.50, according to AAA. This reflects a decline in U.S. oil prices, which fell below $70 per barrel for the first time since the start of the war.
Energy prices accounted for 60% of the month-on-month increase in CPI in May.
Now, with the drop in gasoline prices, Kalsi traders believe that June’s CPI will see prices fall by 0.2% compared to May, in line with Wall Street consensus expectations.
