Inflation above 0.4% for September is still the market's base case

Traders cut the odds of a hot September price print by 10.0 points in 24 hours, but kept them high.

In one line: September consumer prices rise more than 0.4%. The 81% Kalshi price is too low, and an official print of 0.4% or less by 14 Oct proves it wrong.

Traders on Kalshi cut the odds that September's consumer price index (CPI) rises more than 0.4% by 10.0 points in the last 24 hours, to 81%. The contract touched a low of 57% on 19 Sep, climbed to a high of 94% on 24 Sep, and has since given back 13 points. Across the 7 days it is down just 1 point. It resolves Yes if the one-decimal figure exceeds 0.4%, so a reading of 0.5% or above suffices.

The same event lists contracts at other thresholds, a ladder of rungs from 0.0% to 0.7%, and they tell a hot story. Traders price a rise above 0.3% at 89% and above 0.5% at 55%, which puts the median print between 0.5% and 0.6%. A rise above 0.6% draws 15%, and above 0.7% just 5%. Each higher threshold carries lower odds, so the 0.4% rung sits in line with its neighbours.

September's index rises more than 0.4%, and 81% underrates it. The ladder's own centre sits between 0.5% and 0.6%, so this rung needs only a middling hot print to pay. The doubters' best case is the contract's 7-day low of 57%, reached on 19 Sep; they are right if the official September figure, which settles the contract by 14 Oct, shows a rise of 0.4% or less. A hot print would argue against Federal Reserve rate cuts, keeping mortgage rates high and weighing on homebuilders such as ITB.