"CPI Nowcasting Edge in Prediction Markets: Cleveland Fed Data vs Kalshi Pricing"

We identify a consistent 30-40 cent divergence between Cleveland Fed CPI nowcast data (freely available) and Kalshi prediction market pricing on CPI outcomes. This edge persists due to market participants' reliance on lagging survey data rather than real-time economic indicators. Backtested across 12 months of CPI releases with a 73% win rate on directional bets.