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Kalshi has begun approaching major Wall Street banks and hedge funds as it prepares to launch futures contracts tied to US inflation. The prediction market operator is targeting December 2026 for the new products, which will track the Consumer Price Index (CPI) and core inflation. The company has confirmed that it is developing CPI futures but has not announced a firm launch date.
Kalshi's proposed contracts will allow investors to trade directly on changes in US inflation. The products will track headline CPI and core CPI, which excludes food and energy prices. Both measures help investors assess inflation trends and expectations for Federal Reserve interest rates.
The exchange already offers inflation prediction markets that allow customers to trade on whether CPI exceeds certain levels. However, the proposed futures will have defined expiration dates and provide a different way to trade inflation.
Kalshi CEO Tarek Mansour discussed the plans on Friday, October 23, saying, "Inflation has been a big, hot issue right now for people in America." He added that the company was moving into pricing inflation.
Kalshi has appointed Michael Ashton, a former Barclays trader and managing principal of Enduring Investments, to help develop the contracts and attract institutional investors.
Ashton has experience trading inflation-linked products and has held discussions with banks, hedge funds and asset managers about the planned launch. "There's no exchange that trades this and they want to be the inflation exchange," Ashton said.
According to the proposed specifications, Kalshi will offer contracts covering the next 12 monthly CPI reporting periods. It will then offer May and November contracts covering another four years.
Trading will operate around the clock from Sunday through Friday. Kalshi Klear LLC, the company's registered clearinghouse, will handle the transactions.
Kalshi's expansion will bring it into closer competition with CME Group and Intercontinental Exchange, which offer futures contracts used by institutional investors.
CME introduced US CPI futures in 2004 but no longer offers the product. Previous efforts to establish inflation futures struggled to attract enough regular trading activity.
The existing US inflation market includes approximately USD 2.2 trillion in Treasury Inflation-Protected Securities and more than USD 5.4 trillion in inflation swaps.
Unlike privately negotiated swaps, exchange-traded futures use standardized contracts. This allows investors to trade inflation exposure through a central exchange rather than negotiate separate agreements.
Potomac River Capital investment chief Mark Spindel, who has discussed the contracts with Ashton, said a liquid futures market would be "a valuable addition to the toolkit" available to investors and institutions.
Kalshi is expanding beyond sports-related prediction markets into traditional derivatives, including cryptocurrency and commodity futures.
The company has developed perpetual futures, which have no fixed expiration dates. CME CEO Terry Duffy has questioned whether such products meet institutional trading needs. "People can't manage risk with no expiration date," Duffy said when discussing perpetual contracts.
Kalshi's planned inflation futures will instead have fixed expiration dates. The company is seeking institutional participation before its targeted December rollout, although it has not confirmed the final launch schedule.
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