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Posted September 10, 2026 at 1:25 pm
Tomorrow morning’s pivotal Consumer Price Index (CPI) release is expected to come in at an unchanged 3.4% year over year (y/y) rate, and participants in the Interactive Brokers Prediction Markets are signaling just a 20% chance of a hotter-than-anticipated reading. Indeed, the “Yes” contract with a 3.4% threshold is going for $0.20, but I think it’s undervalued, and I believe the cost should be closer to $0.40. The distribution of economist expectations agrees as well, as the Reuters poll of 53 forecasters carries an upside bias, with the median estimate at 3.4% amidst minimum and maximum projections at 3.3% and 3.8%, indicating a belief of loftier print being more likely than a lower result. Over and under, however, the “Yeses” at 3.2%, 3.3%, and 3.5% are at $0.90, $0.63, and $0.07.
The core CPI, which excludes food and energy due to their volatile characteristics, is expected to be 0.2% month over month tomorrow, yet participants in the Interactive Brokers Prediction Market are pricing the “Yes” contract at that threshold at only $0.25. Similar to the example above, I think it should be closer to $0.40, as the Reuters poll of 67 forecasters sees a path to 0.3%. Indeed, the minimum and maximum estimates are 0.1% and 0.3% and those “Yeses” are going for $0.87 and $0.03. The y/y version of the indicator offers a comparable opportunity, as the “Yes” at the consensus expectation of 2.4% is priced at only $0.19, while the 2.2% and 2.6% thresholds are at $0.93 and $0.06.
Tomorrow’s University of Michigan (UMich) Consumer Sentiment Index is expected to reflect a slight decline this month, because elevated inflation, rising interest rates and stock market volatility likely weighed on household moods. The Reuters poll consisting of 34 forecasters collectively predicts a drop from 51.7 to 51, amidst minimum and maximum expectations of 49 and 52.5. The Interactive Brokers Prediction Markets contracts, which settle on the release of the final numbers on Sept. 25 and not tomorrow, offer the 44, 46, 48 and 50 “Yeses” at $0.92, $0.72, $0.59 and $0.47. I find the $0.59 contract attractive as I believe that a plunge to that level from an already low August reading is unlikely, and so does the consensus.
Source for images: Interactive Brokers Prediction Markets.
Note: Prices are highest bids as of the morning of September 10, 2026.
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