Between June 12 and June 26, 2024, the Kalshi prediction market for the Consumer Price Index (CPI) reflecting a 12-month percent change of 2.0 to 2.9% in 2024 saw an increase from $0.39 to $0.54. This price movement was likely driven by several key economic reports and data releases during this period. On June 13, the U.S. Bureau of Labor Statistics (BLS) reported that the CPI for May showed a significant deceleration in inflation, with the overall CPI rising just 0.2% for the month and 3.3% over the past year. This lower-than-expected inflation rate was bolstered by falling energy prices, which dropped by 2.0% in May, including a notable 3.6% decrease in gasoline prices.
Additionally, the Federal Reserve's decision on June 14 to hold interest rates steady provided further confidence that inflation was being brought under control without the need for immediate additional rate hikes. This pause in rate increases, coupled with optimistic projections about the inflation trajectory, likely contributed to the market's reassessment of the probability that CPI would fall within the 2.0 to 2.9% range by the end of 2024. The combination of these economic indicators pointed to a stabilizing inflation environment, which in turn boosted investor confidence in the likelihood of the CPI staying within the targeted range.