Kalshi Traders: U.S. Inflation May Have Peaked in May
Alina Collins
Kalshi contract pricing shows traders believe U.S. CPI likely peaked in May — only a 28% chance the annual reading tops 4.2% this year. Falling oil prices are the key driver, and the June CPI print will be the decisive test.
Why do traders think inflation has already peaked?
Kalshi contracts put just a 28% probability on this year's CPI peak exceeding 4.2%.
4.2% is the actual May annual inflation rate. This means → traders are betting May was the high-water mark, and readings will only fall from here.
In plain terms = roughly three-quarters of market money is positioned for inflation to cool.
What drove oil prices down so sharply?
A thaw in U.S.–Iran tensions led to a partial reopening of the Strait of Hormuz, pulling oil and gas prices off their highs.
The U.S. national average gasoline price fell to $3.84 per gallon, down sharply from a peak above $4.50.
U.S. crude dropped below $70 per barrel for the first time since the conflict began — this reflects a rapid unwinding of geopolitical risk premium.
How does falling oil feed into CPI?
Energy accounted for 60% of May's month-over-month CPI increase.
This means → once energy retreats, the headline CPI number gets dragged down directly — no help needed from other components.
Kalshi traders now expect June CPI to fall 0.2% month-over-month, in line with Wall Street consensus.
When will this call be confirmed or disproven?
The Bureau of Labor Statistics (BLS) will release the June CPI report on July 14.
That report will directly confirm or refute the "May was the peak" thesis — if June CPI turns negative month-over-month, the peak argument holds.
In plain terms = July 14 is the verdict day; the market will find out whether the bet was right.
Content is for reference only, not financial advice.