U.S. Federal Reserve researchers sing praises of prediction markets

A heavy look astatine predictions connected Kalshi called specified platforms invaluable to policymakers and researchers, according to a caller Fed paper.

Feb 19, 2026, 5:01 p.m.

A probe insubstantial astatine the U.S. Federal Reserve praised the usefulness of prediction markets — specifically looking astatine Kalshi — successful getting a real-time grip connected economical policy.

"Kalshi’s forecasts for the national funds complaint and [the U.S. Consumer Price Index] supply statistically important improvements implicit fed funds futures and nonrecreational forecasters, each portion providing continuously updated afloat distributions alternatively than infrequent constituent estimates," according to the insubstantial published connected Thursday.

And the markets, successful which retail investors tin bargain contracts successful virtually immoderate yes-no question successful specified divers fields arsenic economics, authorities and sports, are looking astatine topics connected a unrecorded ground that different sources of accusation don't.

Prediction markets "provide unsocial insights — peculiarly for variables similar [gross home product] growth, halfway inflation, unemployment and payrolls, for which nary different market-based distributions presently exist."

And successful this study, Kalshi predictions "perfectly matched the realized national funds complaint by the time of each gathering since 2022, a feat not achieved by either surveys oregon futures."

Part of the concealed condiment that sets prediction markets isolated arsenic a utile instrumentality whitethorn beryllium the inclusion of retail participants, which makes them "distinct from institutionally dominated markets," the insubstantial noted.

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