Kalshi, the prediction marketplace for betting on news events and real-world outcomes, has racked up a list of notable successes over the past few years. The site successfully predicted President Trump’s election in 2024, and foresaw Zohran Mamdani’s clinching the Democratic Party’s nomination in the New York mayoral primary last June, even as the polls had him trailing behind former Gov. Andrew Cuomo. Now, a new study shows Kalshi has been accurately predicting Fed rate decisions since 2022.
A January working paper—which hasn’t yet been peer reviewed—from the National Bureau of Economic Research found Kalshi’s predictions are just as accurate as Wall Street’s, and that it maintains an edge over Fed funds futures. The modal Kalshi forecast, or the outcome deemed most likely by traders, has had a perfect track record from 2022 through June. “We find the Kalshi median and mode have a perfect forecast record on the day before the FOMC meeting, which represents a statistically significant improvement over the Fed funds futures forecast,” the study’s authors Anthony M. Diercks, Jared Dean Katz, and Jonathan H. Wright wrote.
Katz, coauthor of the working paper and a PhD student at Northwestern University’s Kellogg School of Management, told Fortune that Kalshi’s ability to allow up-to-the-minute decision changes gives the platform an edge over the traditional survey of primary dealers conducted by the New York Fed. Kalshi predictions “are on par, and they react instantly to news, or at a much higher click to news, than waiting six weeks for the next survey,” Katz said.
Prediction markets have amassed stronger appeal in the past year, growing their annualized trading volume from $300 million to about $40 billion to $50 billion since August 2025, according to a December report from Foresight Ventures, a crypto venture capital firm. Kalshi allows traders to see how decisions track daily, or even by the minute, providing agility that tops the six-week frequency of the New York Fed’s survey of primary dealers.
Kalshi’s edge
According to Katz, much of the advantage Kalshi holds in accuracy over other forecasters is thanks to its record on the September 2024 Federal Open Market Committee meeting, where Kalshi’s median and mode correctly placed greater weight on a 50-basis-point cut, while other forecasters remained divided. The move was larger than many forecasters expected, and was the only time the forecasters were wrong during the period the study analyzed. Yet Kalshi’s correct decision handed the platform a zero-error rate over the surveyed time period.
Beyond simply providing a point estimate of what will happen, Katz argues that the true value of prediction markets lies in their ability to visualize the depth of market doubt. “Being able to see uncertainty—for instance, among respondents—is very useful for a forecaster trying to understand how uncertain a future FOMC meeting is going to be,” Katz said.
The platform has also maintained sustained accuracy when predicting other macro trends. The paper mentions the site’s prediction for inflation and unemployment numbers are statistically similar to the Bloomberg consensus, with forecast errors that “are almost the same” as Bloomberg’s. A 2025 study authored by Kalshi claims the platform is more accurate at forecasting inflation shocks than consensus estimates. The study—conducted between February 2023 to mid-2025—found that Kalshi’s forecasts had a 40.1% lower mean absolute error than consensus forecasts, and that the platform outperformed during shocks.
But as prediction markets gain steam, some flaws remain in their model. In early January, an anonymous Polymarket trader made $400,000 betting on Venezuelan leader Nicolás Maduro’s downfall, raising concerns about insider trading. The event also sparked conflict among traders, who couldn’t agree on whether or not the U.S. had actually “invaded” Venezuela.
Ahead of the January FOMC meeting, 99% of traders on Kalshi predicted the Fed would hold rates steady, with just 1% predicting a 25 bps cut. Yet traders remain uncertain about longer-term decisions, with the platform currently split on such topics as the number of rate cuts in 2026 and when the Fed may next hike rates.
However, Katz said he believes prediction markets will only grow more accurate over time. “The more liquid these markets are, the more you would think that some wisdom of the crowd effect is taking place,” he noted. “If there’s a lot more people trading on a market like this, then it could give a more accurate forecast.”
