Kalshi may be more useful than some traditional economic forecasting methods, Fed researchers find
Business Insider
February 19, 2026
AI-Generated Deep Dive Summary
A new research paper from Federal Reserve economists highlights that Kalshi, a prediction market platform, offers more accurate economic forecasts than traditional methods. The study found Kalshi significantly outperformed established tools like Bloomberg consensus for inflation forecasting and achieved a perfect record in predicting Fed rate decisions. This validation underscores its value as a high-frequency, real-time data source, making it invaluable for researchers, policymakers, and investors seeking reliable insights.
Kalshi's effectiveness lies in its ability to provide continuous updates that reflect real-world events instantly, unlike traditional surveys or financial analyses which can lag behind. The paper noted that Kalshi’s median and mode predictions were more accurate than Fed Funds futures, particularly the day before Federal Reserve meetings. This capability makes it a powerful tool for gauging macroeconomic expectations with greater precision.
The study arrives as investors increasingly question the reliability of conventional economic data, driving demand for alternative forecasting tools. While institutions like Goldman Sachs explore entering prediction markets, concerns about gambling and insider trading persist among lawmakers. Despite these challenges, Kalshi’s proven track record positions it as a leading innovator in economic forecasting, offering valuable insights to businesses navigating an uncertain financial landscape.
Verticals
businessfinance
Originally published on Business Insider on 2/19/2026