TechFlame News — Researchers from the Federal Reserve have released a new paper that highly praises the role of prediction markets in economic analysis, specifically highlighting the performance of the prediction platform Kalshi.

The report notes that Kalshi’s predictions regarding the federal funds rate and the U.S. Consumer Price Index (CPI) statistically outperform those of federal funds futures and professional economists. Additionally, it provides continuously updated full probability distributions rather than traditional intermittent point forecasts.

The study also suggests that prediction markets offer unique market-based distribution data for areas such as GDP growth, core inflation, unemployment rates, and nonfarm payrolls—variables that previously lacked comparable market-pricing tools. Since 2022, Kalshi’s predictions for Federal Reserve interest rate meeting outcomes have been entirely consistent with the actual results.

The report points out that a key advantage of prediction markets lies in the participation of retail investors, distinguishing them from traditional financial markets dominated by institutions. This gives them unique value in information aggregation and real-time reflection of market expectations.