Inflation peaked in May as energy prices fell in June, Kalshi traders think
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- Kalshi traders assign just a 28% probability to 2026 headline CPI exceeding 4.2%, the annual rate recorded in May, with the next June CPI report due from the BLS on July 14
- Energy prices account for 60% of the CPI's month-over-month increase in May and have since retreated after the U.S.-Iran detente and partial reopening of the Strait of Hormuz, which had closed following the late February war
- Average national gasoline prices fell to $3.84 as of Wednesday, down from a peak above $4.50, while U.S. crude oil dropped below $70 per barrel for the first time since the war began
- Kalshi contracts ask traders whether CPI will print above various thresholds in 2026 and resolve against BLS data, with speculators now betting June CPI will decline 0.2% from May—matching Wall Street consensus
Why it matters: With energy responsible for 60% of May's CPI jump and crude now under $70 a barrel, the market is pricing in June CPI as the first cooling print since the war began—a decline Wall Street already expects—giving the Fed cover if June data confirms the trend.
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