Scan: Will inflation reach more than 5% in 2026?

date	predicted	market price	confidence
2026-09-01	5%	7%	77%
2026-08-23	5%	8%	78%
2026-08-16	6%	8%	76%

1. Planner Fable 5.1 · Fermi decomposition + tool plan

Tools chosen: polymarket_direct polymarket_related kalshi_related fred article_search claude_news code_execution

Sub-questions (Fermi decomposition)

What is the most recent BLS headline CPI year-over-year print and what has the month-over-month trend been over the last 6-12 months?
What do market-implied measures (1-year and 2-year TIPS breakevens, inflation swaps) and professional forecasters (Fed SEP, Cleveland Fed nowcast, Survey of Professional Forecasters) project for 2026 CPI?
How large is the remaining tariff pass-through into goods prices, and what is the estimated peak contribution to headline CPI in 2026?
What is the outlook for energy prices (oil, gasoline) and are there geopolitical or supply shocks that could produce a rapid CPI spike above 5%?
Historically, how often has YoY CPI risen by 2+ percentage points within 12 months from a starting level near 2.5-3.5% absent a major oil shock or pandemic?
What are the current prices on Polymarket's other inflation thresholds (3%, 4%, 6%) and Kalshi's CPI markets, and do they imply a consistent distribution?

Planner reasoning

This is a Polymarket question on whether US year-over-year headline CPI exceeds 5.0% (i.e., prints 5.1%+) for any month of 2026. The key drivers are the current CPI trajectory, tariff pass-through, energy/oil shocks, Fed policy stance, and market-implied inflation expectations (breakevens, inflation swaps). The Polymarket price is the primary anchor, with Kalshi CPI markets and other Polymarket inflation thresholds as cross-checks.

2. Research Parallel tool calls

tool	status	time	items	summary
polymarket_direct	OK	0.7s	1	## This Market's Polymarket Data Will inflation reach more than 5% in 2026? - Current price (probability): 9.50% - 7-day price change: +2.00% - 30-day price change: +1.50% - Total volume: $326,473 (USD notional) - Price range: 6.00% - 15.50% - Data points: 90 days
polymarket_related	OK	0.1s	0	Scanned 100 active Polymarket markets, kept 0 matches. keyword 'inflation 2026': 0 markets \| keyword 'CPI': 0 markets \| keyword 'inflation reach': 0 markets
kalshi_related	OK	3.1s	2	2 related markets / summaries. series KXCPI: 0 markets (skipped 25 no-signal) \| series KXCPIYOY: 0 markets (skipped 42 no-signal) \| series KXINFLATION: 0 markets (skipped 0 no-signal) \| keyword 'CPI': ok \| keyword 'inflation': ok
fred	OK	4.6s	6	Fetched 6 FRED series (lookback=730d).
article_search	OK	3.8s	24	Fetched 24 unique articles across 4 queries (lookback=45d). 'CPI inflation report BLS latest': 10 articles \| 'tariff pass-through inflation 2026 forecast': 10 articles \| 'Fed inflation outlook 2026 SEP projections': 10 articles \| 'oil price shock inflation risk 2026': 10 articles
claude_news	OK	24.6s	17	## Key Findings - Latest CPI (August 2026, released Sept 11, 2026): The consumer price index rose 0.4% in August, putting the 12-month increase at 3.4%, both in line with estimates. However, the core CPI accelerated 0.3% for the month, a bit higher than expected, as the annual inflation rate
code_execution	OK	49.8s	0	## Key Findings Historical base-rate analysis (1960–2025, approximate monthly CPI YoY series): - Of 215 historical months where YoY CPI started in the 2.5%–3.5% band, only ~4.2% subsequently saw YoY jump by ≥2 percentage points within the following 12 months (e.g., ~3% → >5%). - This ~4% ba

3. Evidence Brief Sonnet 5 · 6361 chars

# Current state As of the most recent BLS release (August 2026 CPI, published 2026-09-11), headline YoY CPI is 3.4% and core YoY is running near 2.4% — both far below the 5% threshold this market requires. The market cannot resolve "No" until the December 2026 report is issued; through 2026 it resolves "Yes" the first month headline YoY prints >5.0%. # Timeline of key events - 2025-09: Aug 2025 CPI YoY baseline ~3.0% (used for later YoY base effects). Confirmed (FRED/wichitaliberty.org). - 2026-01–2026-08: CPI index (CPIAUCSL) rises from 326.6 to 334.1; MoM prints are volatile, including a notably hot +0.87% in March 2026. Confirmed (FRED, derived). - 2026-06: Fed's June SEP sharply raises 2026 inflation projections (PCE to 3.6% Q4/Q4 from 3.3%; core PCE to 3.3%) explicitly citing an Iran-war-driven oil shock. Reported (yardeni.com/statista.com). - 2026-06 (Q2): Philly Fed SPF current-quarter headline CPI forecast spikes to 6.0% annualized (oil-shock driven), but full-year 2026 Q4/Q4 forecast remains 3.5% headline / 2.9% core. Reported (philadelphiafed.org). - 2026-08-12: July CPI report released — "tepid," gives Fed breathing room. Confirmed (CNBC). - 2026-08-25 to 09-10: Oil (WTI) climbs from ~$83 to ~$97/bbl amid Middle East tensions; PPI (Aug) +0.4% MoM. Confirmed (FRED, CNBC). - 2026-09-11: August CPI released — headline +0.4% MoM / 3.4% YoY; core +0.3% MoM. Energy +2.1% MoM / +16.3% YoY; gasoline +27.4% YoY; fuel oil +52% YoY. Confirmed (BLS via CNBC/claude_news). - 2026-09-14: TIPS breakevens: 1Y 2.4-2.5%, 5Y ~2.4-2.5%, 10Y ~2.35-2.37% — no market pricing of a 5% inflation regime. Confirmed (FRED). # Event Will 2026 headline CPI YoY (any monthly BLS report during 2026) exceed 5%? # Outcomes to forecast Yes / No # Kalshi market anchor No direct Kalshi ticker was returned; the event's own ticker (0xa792f0...) is a Polymarket contract. **Polymarket YES price: 9.5%**, up from 6-8% a month ago (30d +1.5pp, 7d +2.0pp; range 6.0–15.5% over 90 days; volume $326k). This is the primary consensus anchor to beat. Related Kalshi CPI series for 2026 specifically returned no matching contracts (only unrelated 2034-2036 threshold markets with thin volume, not comparable). # Sub-question answers 1. **Latest CPI print/trend** — Aug 2026 headline YoY 3.4% (up from 3.0% Aug 2025, base-effect driven); core YoY ~2.4%. MoM has been volatile (e.g., +0.87% in March, -0.42% in May, +0.40% in Aug), reflecting tariff/energy noise but no sustained acceleration trend. [FRED, CNBC] 2. **Forecaster/market projections** — Fed SEP (June 2026): Q4/Q4 PCE 3.6%, core PCE 3.3% (raised post oil-shock). Philly Fed SPF: full-year 2026 headline CPI 3.5%, core 2.9%. TIPS breakevens: 1Y ~2.4-2.5%, 10Y ~2.35%. All well under 5%. [Fed SEP, philadelphiafed.org, FRED] 3. **Tariff pass-through** — No explicit peak-contribution estimate found; PIIE (pre-Iran-shock) argued tariffs + fiscal + tight labor market could push inflation "potentially exceeding 4%" by end-2026 — still below 5%. [PIIE] 4. **Energy/geopolitical risk** — Iran war escalation has driven oil to ~$92-97/bbl (from ~$83), with TD Economics flagging risk of >$100/bbl sustained and >$90 through year-end; this is the dominant upside catalyst and already lifted energy CPI +16% YoY, gasoline +27% YoY — yet headline CPI is still only 3.4%. [FRED, economics.td.com, CNBC] 5. **Historical base rate** — From ~2.5-3.5% starting YoY, only ~4.2% of historical 12-month windows (1960-2025) saw a +2pp jump (roughly to >5%) absent a major oil/pandemic shock; a Monte Carlo under smooth dynamics gives <0.5%. Synthesis: base case 3-6% probability absent an extreme regime shock. [code_execution] 6. **Cross-market distribution** — Polymarket related-market search found no other 2026 threshold markets (3%/4%/6%) to cross-check; Kalshi related search returned only unrelated out-year (2034-36) contracts. No consistent multi-bucket distribution available. [polymarket_related, kalshi_related] # Key facts 1. [BLS/CNBC] Aug 2026 CPI: +0.4% MoM, 3.4% YoY headline; core +0.3% MoM. 2. [CNBC] Energy +16.3% YoY, gasoline +27.4% YoY, fuel oil +52% YoY — largest upside driver, tied to Middle East/Iran tensions. 3. [Fed SEP, June 2026] 2026 Q4/Q4 PCE projection raised to 3.6% (core 3.3%) due to oil shock. 4. [Philly Fed SPF Q2 2026] Full-year 2026 CPI forecast 3.5% headline, 2.9% core. 5. [FRED] 1Y/10Y TIPS breakevens ~2.4-2.5%/2.35% as of Sept 2026 — no inflation-shock pricing. 6. [FRED] WTI oil rose from ~$83 (late Aug) to ~$97 (Sept 9, 2026). # Cross-market signals - Polymarket (this market): 9.5% YES, rising modestly (+2pp/7d). - Kalshi: no matching 2026 CPI-threshold contract found; unrelated out-year contracts show noisy, thin pricing not usable for calibration. - Sportsbook: n/a. # Analyst opinions and speculation - PIIE (contrarian, pre-Iran shock): inflation could exceed 4% by end-2026 due to tariffs/fiscal/labor tightness — still under 5%. - Mainstream (Fed, SPF, TIPS market): consensus centers on 2.9-3.6% for 2026, no institutional forecast approaches 5%. - Cleveland Fed nowcast: CPI YoY ~3.4%, core ~2.3-2.4%, no near-term signal of acceleration toward 5%. # Directional lean per outcome - **Yes (>5%)**: Requires a major additional oil/supply shock (e.g., Iran war escalation to $100+/bbl sustained) or tariff pass-through surprise; current trajectory (3.4%) and all forecaster/market measures argue against, historical base rate only ~3-6%. - **No (≤5%)**: Strongly favored — current YoY 3.4%, Fed/SPF/TIPS all project sub-4% for 2026, and reaching 5% requires ~1.6pp acceleration in remaining months, historically rare absent extreme regime shock. # Gaps / unknowns - No granular monthly path for Sept-Dec 2026 CPI provided. - Uncertain extent/duration of Iran-war oil shock; could still intensify. - No confirmed core CPI YoY figure reconciliation (claude_news's "2.4%" core YoY conflicts with typical spread over headline; treat cautiously). - No comparable Polymarket/Kalshi buckets (3%/4%/6%) to validate implied distribution consistency. # Calibration anchors - Polymarket YES (anchor): 9.5%, uptrending slightly. - Historical/statistical base rate: ~3-6% (code_execution synthesis) for a >5% CPI print within 12 months from a ~3% starting level absent an extreme shock. - Fed/SPF/TIPS-implied 2026 inflation: 2.9-3.6%, i.e., well below the 5% bar.

4. Forecasters Fable 5.1 + GPT-5.6 Sol · in parallel

claude-fable-5-1

72% conf

Yes	6%
No	94%

August 2026 headline CPI is 3.4% YoY, so a 'Yes' requires roughly +1.6pp of acceleration within the four remaining reports (Sep–Dec), implying monthly prints averaging near +0.9% MoM — far above anything outside the 2021-22 or 1970s oil-shock regimes, even with WTI already at ~$97 and energy CPI +16% YoY. Every institutional and market measure (Fed SEP 3.6% PCE, SPF 3.5% CPI, TIPS 1Y breakeven ~2.5%, Cleveland Fed nowcast 3.4%) sits well below 5%, and the historical base rate for a +2pp jump in 12 months from a ~3% start is only ~3-6%. The Polymarket anchor at 9.5% is the consensus, but the compressed time window and required arithmetic argue for shading below it; the residual tail reflects an Iran-war escalation pushing oil sustainably above $120 plus tariff pass-through surprises.

gpt-5.6-sol

74% conf

Yes	8%
No	92%

The 9.5% Polymarket YES price is the consensus anchor, but the August headline CPI reading of 3.4% implies that inflation must accelerate roughly 1.6 percentage points to cross 5%. Fed, SPF, Cleveland Fed, and TIPS indicators all remain well below 5%, while even tariff-focused analysis suggests inflation potentially exceeding 4% rather than 5%. Energy is the principal upside risk, with oil near $97 and energy CPI already up 16.3% year over year, but this substantial shock has so far lifted headline inflation only to 3.4%. I therefore place YES modestly below the market anchor while retaining meaningful tail probability for further Iran-war or supply-shock escalation.

5. Devil's Advocate Sonnet 5 · red-team critique

Both forecasters land below the Polymarket anchor (9.5%) with similar logic, but neither seriously engages why the market itself is pricing higher than their base-rate-driven estimate—e.g., the market's uptrend (+2pp/7d, from 6-8% a month ago) could reflect real-time information about oil/Iran escalation risk that the historical base rate (calibrated on pre-2022 "normal" regimes) doesn't capture; dismissing the anchor without addressing this momentum is a potential underweighting.

Neither forecast grapples with the asymmetry in the base-rate calculation itself: the brief notes the "4.2% of historical windows" and "<0.5% Monte Carlo" figures are for windows "absent a major oil/pandemic shock," yet 2026 explicitly HAS an ongoing Iran-driven oil shock (WTI $83→$97, energy CPI +16.3% YoY) — this is exactly the conditioning event the base rate excludes, so anchoring so heavily on the unconditional ~3-6% base rate understates risk.

Both cite the "same" set of institutional forecasts (Fed SEP 3.6%, SPF 3.5%, TIPS 2.5%) as if independently corroborating, but these are not independent — SEP and SPF are surveys of the same professional forecasters and Fed communications, so triangulating three highly correlated sources as if they were four separate confirmations overstates confidence in the sub-5% consensus.

Neither forecaster addresses the tail scenario where oil sustains >$100-120/bbl for multiple months compounding with tariff pass-through (PIIE's "exceeding 4%" estimate was pre-Iran-shock and could be revised upward)—the brief flags TD Economics risk of sustained >$100 oil as a real possibility, but both treat this as a minor residual (~6-8%) rather than modeling how compounding shocks (energy + tariffs + fiscal + tight labor market simultaneously) could push closer to 5%.

The core CPI YoY figure of 2.4% is flagged in the brief as potentially unreliable ("conflicts with typical spread over headline; treat cautiously"), yet neither forecaster acknowledges this data-quality caveat or its potential implications for the reliability of the 3.4% headline trajectory itself.

Both forecasts are very close to each other (6% vs 8%) and both near the anchor, suggesting anchoring bias/herding rather than truly independent analysis — given the genuine uncertainty flagged around oil shock duration/intensity ("could still intensify"), a wider spread or higher variance estimate might be more appropriate than this tight convergence.

6. Aggregator Fable 5.1 · final calibrated forecast

8% (73% confidence)

Yes: 8% No: 92%

August headline CPI is 3.4% YoY with only four reports remaining; crossing 5% by December requires Sep–Dec MoM prints averaging roughly +0.65–0.7% (versus ~0.25% base-effect months being replaced), a pace seen only in 2022-style or 1970s oil-shock regimes. The critique is right that the unconditional base rate understates risk given an active Iran-driven oil shock (WTI ~$97, energy CPI +16% YoY) and that the market's uptrend carries real information, so I shade up from Forecast 1 — but even a further spike to $120-130 oil adds only ~1pp to headline in the near term, and no institutional or TIPS measure approaches 5%. Polymarket's 9.5% on a long-dated tail contract likely embeds some longshot/capital-cost premium, so a final ~7.5% sits between the forecasters and the anchor, retaining a meaningful tail for compounding oil + tariff pass-through escalation.

Pipeline Timing

Total pipeline time: 169.6s

Per-tool research timings shown in the Research section above.