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Posted August 11, 2026 at 1:10 pm
Tomorrow’s July US Consumer Price Index’s (CPI) 3.3% “Yes” contract, in my opinion, is undervalued at $0.53 as the distribution of economist estimates signals a higher chance for an upside surprise rather than a downside miss. Indeed, in the monthly Reuters poll of 53 forecasters, expectations range from a minimum of 3.3% to a maximum of 3.6% amidst a 3.4% median projection. Additionally, my expectation, at 3.44%, and it’s unlikely that cost pressures cooled much from June’s 3.5% against the backdrop of elevated fuel charges stemming from ongoing disagreements between the US and Iran. Turning to the over and under thresholds in the Interactive Brokers Prediction Markets, the “Yeses” at 3.1%, 3.2%, 3.4% and 3.5% are going for $0.97, $0.89, $0.18 and $0.06.
For similar reasons, I believe the “Yes” at 2.4% for the Core CPI is undervalued, too, at just $0.39. The monthly Reuters poll of 50 forecasters places the minimum and maximum estimates at 2.4% and 2.8% amidst a median of 2.5%, signaling a heavier possibility of a stronger-than-anticipated figure rather than a weaker-than-projected one, according to the distribution of economists’ views. The prior result was 2.6% and my official expectation is at 2.53% because I don’t see a significant amount of cooling to the tune of roughly 20 basis points in the indicator as likely either.
Germany’s CPI, to be released tomorrow, is likely to land close to the preliminary print of 125.72 because revisions historically haven’t deviated much from flash releases. For this reason, the Interactive Brokers Prediction Markets price the “Yeses” with thresholds of 125 and 126 at $0.98 an $0.05 since it’s a likely that the gauge will arrive between those two numbers.
Source for images: Interactive Brokers Prediction Markets.
Note: Prices are highest bids as of the morning of August 11, 2026.
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