Fed economist says Kalshi could be new macro predicting tool

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Benzinga
11:31 AM ET Feb-19-2026
A new working paper from Fed economists, alongside researchers at Northwestern and Johns Hopkins, concludes that Kalshi rivals or beats professional Wall Street forecasts on key economic data, and does it in real time.

What The Paper Found
On headline CPI, Kalshi delivered a statistically significant improvement over the Bloomberg consensus forecast.

On core CPI and unemployment, it ran neck-and-neck with professional forecasters surveyed by the New York Fed, but updates continuously, rather than every six weeks.

The most striking finding: Kalshi’s rate predictions achieved a perfect track record on the day before each FOMC meeting since 2022, which the paper describes as a statistically significant improvement over fed funds futures.

The paper also flagged an asymmetry traders should note: hot inflation prints move rate expectations far more sharply than cool ones. In plain terms, bad news hits faster than good news.

The authors argued the Fed itself should start using Kalshi data, calling current benchmarks “too far removed.”

Stocks Affected By The Prediction Market Boom
As volumes explode, prediction markets remain controversial, states are already pushing back on sports contracts, and regulators are jostling over who gets to control them

If prediction markets become the go-to tool for traders, policymakers, and the Fed itself, the platforms hosting them stand to see continued growth and the incumbents they’re displacing could feel serious pain.

Here are some of the stocks that could be most affected.

Robinhood Markets (HOOD.NaE) is the most direct play. Kalshi’s sports and macro contracts are already embedded in the Robinhood app, giving Kalshi access to Robinhood’s 27 million-plus funded accounts.

Coinbase Global (COIN.NaE) CEO Brian Armstrong has made prediction markets a core pillar of his ‘Everything Exchange’ vision, rolling out Kalshi-powered contracts across the country.

DraftKings (DKNG.NaE) is the flip side of this trade. Kalshi’s federal CFTC license lets it operate in all 50 states, bypassing the state-by-state restrictions that limit traditional sportsbooks. If prediction markets keep gaining ground, DraftKings (DKNG.NaE) faces a structurally better-regulated competitor eating into its market.

Flutter Entertainment (FLUT.NaE) could be another casualty. The parent company of FanDuel has shed over 44% of its value this year as Kalshi eats into its core sports betting revenue.

DraftKings (DKNG.NaE) and FanDuel launched their own prediction market apps in December, but neither has come close to matching Kalshi’s pace. Bank of America has downgraded both stocks, citing threats from prediction markets.

Image: Shutterstock

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