Kalshi, a prediction marketplace where users bet on news events and real-world outcomes, has notched several notable wins in recent years. The platform correctly forecasted President Trump’s 2024 election victory and anticipated Zohran Mamdani securing the Democratic nomination in last June’s New York mayoral primary—even as polls showed him trailing former Governor Andrew Cuomo. Now, a new study reveals Kalshi has been accurately predicting Federal Reserve rate decisions since 2022.
A January working paper—which hasn’t yet undergone peer review—from the National Bureau of Economic Research found Kalshi’s forecasts are as precise as Wall Street’s and hold an edge over fed funds futures. The modal Kalshi prediction, or the outcome traders deem most likely, boasts 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, representing a statistically significant improvement over the fed funds futures forecast,” the study’s authors , , and wrote.
Katz, co-author of the working paper and a PhD student at Northwestern University’s Kellogg School of Management, told that Kalshi’s ability to allow real-time decision adjustments gives it an advantage over the New York Fed’s traditional primary dealer survey. Kalshi predictions “are on par [with the survey] and react instantly to news—far faster than waiting six weeks for the next survey round,” Katz explained.
Prediction markets have grown more appealing to traders over the past year, with annualized trading volume surging from $300 million to roughly $40 billion to $50 billion since August 2025, per a December report from Foresight Ventures, a crypto venture capital firm. Kalshi lets traders track forecast trends daily or even minute-by-minute, offering agility that outpaces the six-week frequency of the New York Fed’s primary dealer survey.
Kalshi’s Competitive Edge
According to Katz, much of Kalshi’s accuracy advantage over other forecasters stems from its performance in a key Federal Open Market Committee meeting, where Kalshi’s median and mode correctly prioritized a 50-basis-point rate cut while other forecasters remained divided. The move was larger than most expected and marked the only time other forecasters were wrong during the study’s analyzed period. Kalshi’s correct call, however, kept its error rate at zero for the timeframe.
Beyond just providing a point estimate of future events, Katz argues that the true value of prediction markets lies in their ability to visualize the depth of market uncertainty. “Being able to see doubt—for instance, among participants—is very useful for a forecaster trying to gauge how uncertain an upcoming FOMC meeting’s outcome will be,” Katz said.
The platform has also maintained consistent accuracy in predicting other macro trends. The paper notes Kalshi’s inflation and unemployment forecasts are statistically similar to the Bloomberg consensus, with errors “almost identical” to Bloomberg’s. A separate report by Kalshi claims the platform is more accurate at forecasting inflation shocks than consensus estimates; conducted from February 2023 to mid-2025, the study found Kalshi’s forecasts had a 40.1% lower mean absolute error than consensus and outperformed during shock events.
But as prediction markets gain traction, their model still has flaws. In early January, an anonymous Polymarket trader wagered $400,000 on Venezuelan leader Nicolás Maduro’s downfall, sparking insider trading concerns. The incident also ignited debate among traders over whether the U.S. had actually “invaded” Venezuela.
Ahead of the January FOMC meeting, 99% of Kalshi traders predict the Fed will hold rates steady, with just 1% forecasting a 25-basis-point cut. Yet traders remain split on longer-term decisions, such as the number of rate cuts in 2026 and when the Fed may next hike rates.
However, Katz is optimistic that prediction markets will grow more accurate over time. “The more liquid these markets are, the stronger the wisdom-of-the-crowd effect is likely to be,” he said. “If more people trade on platforms like this, forecasts could become even more precise.”