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PPI YoY exceed CPI YoY for 3+ consecutive months in 2026? — Above CPI YoY

KXPPIVSCPI-27FEB01-TCPIYOY · Economics · 2026-04-07
91%
Agent
93%
Market Price
-2.0%
Edge
78%
Confidence
Final Rationale
My independent estimate of 90% was based on confirmed February 2026 data showing PPI YoY at 3.4% vs CPI YoY at 2.4% (a 100bps spread), strong PPI momentum (0.7% monthly surge, core PPI at 3.9% with 10 consecutive advances), and the structural tailwind from 2026 tariff policies. The Devil's Advocate correctly identified that January 2026 PPI YoY is unconfirmed (Challenge 1) and that the combination method was imprecise (Challenge 2), which I partially accept — but the core logic remains strong given that even with only one confirmed month, the spread is wide enough and the structural drivers persistent enough that achieving 3 consecutive months out of 12 opportunities is highly likely. I reject Challenge 5 about the FRED anomaly, as the BLS-reported 2.4% CPI figure is the authoritative source. The market at 93% is only 3% above my estimate, well within convergence range; the slight gap likely reflects January PPI data available to traders or fuller pricing of the multiple-opportunities dynamic. I nudge slightly upward from 0.90 toward the market but retain modest skepticism about H2 2026 volatility from potential tariff policy reversals.
Price vs. prediction
How the market moved after the agent's call. Solid blue line is the actual market price; dashed line is the agent's static forecast at $t{=}0$.
$n = 36$ follow-ups
1. Planner Opus · Fermi decomposition + tool plan
Tools chosen: kalshi_data fred_data article_search web_search code_execution wikipedia_lookup
Sub-questions (Fermi decomposition)
  1. Is PPI YoY currently above CPI YoY as of early 2026 (January-March 2026)? (w=0.35)
  2. Will the PPI-CPI spread remain positive for at least 3 consecutive months in 2026 given current macro conditions (tariffs, supply chain, commodity prices)? (w=0.40)
  3. Do historical patterns suggest PPI YoY exceeds CPI YoY for 3+ consecutive months in years with elevated tariff/trade disruption? (w=0.25)
Planner reasoning
This question asks whether PPI YoY > CPI YoY for any 3+ consecutive calendar months in 2026. The key analytical steps are: (1) Check current data — as of April 2026 we need Jan, Feb, Mar 2026 PPI and CPI YoY figures to see if the streak has already been established. (2) Understand the macro mechanism: tariffs disproportionately hit PPI (which measures prices at the producer level) before flowing through to CPI, so the 2025-2026 tariff environment under the Trump administration should widen PPI-CPI spread. (3) The condition is relatively easy to satisfy once a spread is established, since it just needs any 3 consecutive months anywhere in 2026, not necessarily starting in January. (4) Historical base rate: PPI exceeds CPI in tariff-heavy or commodity-shock years (2021-22 is a prime example). (5) The spread historically reverts as cost pass-through completes, so an early-2026 reading of PPI>CPI is very informative for the full year. The critical unknown is whether early 2026 data already shows PPI>CPI — if Jan-Mar 2026 already shows this pattern, resolution probability is very high.
2. Research Parallel tool calls · legacy v2
ToolStatusTimeItemsSummary
kalshi_data OK 3.6s -
fred_data OK 1.0s -
article_search OK 0.1s -
web_search OK 42.5s -
code_execution OK 0.0s -
wikipedia_lookup OK 1.1s -
3. Evidence Synthesis Sonnet · 12 items · legacy v2
#StrengthCredibilityDirectionSourceClaimPriced In
1 STRONG - ↑ UP web_search CPI-U YoY for February 2026 was 2.4%, while PPI Final Demand YoY for February 2026 was 3.4%, confirming PPI > CPI for at least February 2026. Yes
2 STRONG - ↑ UP fred_data FRED data shows PPIFID YoY at +4.867% and PPIFIS YoY at +5.176% as of February 2026, both substantially above the web_search-reported CPI of 2.4% YoY — confirming PPI Final Demand > CPI YoY in February 2026. Note: FRED CPIAUCSL YoY of +7.78 appears anomalous and likely reflects a data coding issue. Yes
3 MODERATE - ↑ UP kalshi_data The Kalshi market for this question currently prices at 93%, up +73% over 30 days, suggesting the market strongly believes the condition has already been met or is nearly certain to be met. No
4 MODERATE - ↑ UP web_search January 2026 CPI-U rose 0.2% monthly; combined with February's 2.4% YoY reading, the early 2026 CPI trend is moderate (~2.4%), while PPI has been rising faster, suggesting PPI > CPI was likely true in January as well. Yes
5 STRONG - NEUTRAL web_search March 2026 CPI data is scheduled for release April 10, 2026 and March 2026 PPI for April 14, 2026 — neither had been released at the time of this research, leaving the third data point (March) unconfirmed. Yes
6 STRONG - ↑ UP web_search February 2026 PPI Final Demand surged 0.7% monthly (biggest in 7 months), with goods prices up 1.1%, beating economist forecasts of 0.3% — indicating upward momentum in PPI that could sustain the PPI > CPI spread. Yes
7 STRONG - ↑ UP web_search Core PPI (final demand less foods, energy, and trade services) rose 3.9% YoY in February 2026, the tenth consecutive monthly advance, suggesting persistent and broad-based producer price pressure above the CPI reading of 2.4%. Yes
8 MODERATE - ↑ UP web_search Following the February 2026 PPI report, futures markets pushed the next Fed rate cut to at least December 2026, implying market participants expect sustained elevated producer prices and limited near-term monetary easing. Yes
9 MODERATE - ↑ UP fred_data PPIACO (all commodities) YoY was +9.32% as of February 2026, significantly above CPI YoY (~2.4%), providing additional confirmation that upstream producer prices are broadly elevated relative to consumer prices. Yes
10 MODERATE - ↑ UP code_execution Historical base rate analysis (post-2000) finds PPI YoY exceeded CPI YoY for 3+ consecutive months in 44% of calendar years; in tariff-disruption years, the estimated rate rises to 66%. Yes
11 MODERATE - ↑ UP wikipedia_lookup The PPI measures prices received by domestic producers and is inherently more sensitive to supply chain disruptions and import tariff pass-through than the CPI, which is dampened by services, housing, and retail margins. Yes
12 WEAK - NEUTRAL fred_data The FRED CPIAUCSL YoY figure of +7.78% appears anomalous and inconsistent with BLS-reported 2.4% YoY for February 2026 — this data point should be treated as potentially erroneous and is flagged as conflicting with other strong sources. No
Information Gaps
  • January 2026 PPI Final Demand YoY figure not explicitly confirmed (only February 2026 PPI data is directly cited — January data would be needed to confirm a Jan-Feb-Mar streak vs. Feb-Mar-Apr).
  • March 2026 CPI and PPI data not yet released at time of research (scheduled April 10 and April 14, 2026 respectively).
  • No data on the specific tariff schedule in effect in Q1 2026 or the magnitude of tariff-driven cost pass-through to PPI.
  • No forward-looking analyst forecasts for March–December 2026 PPI and CPI YoY to assess whether the spread is expected to persist.
  • The anomalous FRED CPIAUCSL YoY of +7.78% (vs BLS-reported 2.4%) has not been explained — may reflect index-level vs. percent-change data reporting issue.
  • No data on commodity price trajectories (oil, metals, agricultural inputs) for H2 2026 that could affect PPI-CPI spread sustainability.
  • Historical base rate calculation methodology for 'tariff-adjusted rate' of 66% is not fully transparent from the code execution output.
Key Uncertainties
  • Whether January 2026 PPI YoY was also above CPI YoY — if so, the 3-consecutive-month condition may already be satisfied (Jan+Feb+Mar pending).
  • Whether the March 2026 PPI YoY (releasing April 14) will remain above CPI YoY (releasing April 10) — given February's PPI momentum, this seems likely but is unconfirmed.
  • Potential for CPI to accelerate in Q2-Q3 2026 (e.g., shelter, services re-acceleration) that could close or reverse the PPI-CPI spread.
  • Potential for PPI to decelerate sharply if commodity prices fall (e.g., oil price drop) or tariff exemptions are granted.
  • The degree to which current tariff/trade policy uncertainty under the Trump administration creates upward vs. deflationary (demand destruction) pressure on producer prices.
  • Whether the fresh/dry vegetables price spike (+48.9% in Feb 2026) is a one-time shock or reflects broader supply chain stress that sustains PPI elevation.
Market Context
Price: 0.93 · 7d: +0.07 · 30d: +0.73
Volume: HIGH — 2552 average daily contracts is substantial for a prediction market on this type of economic indicator · Depth: MEDIUM — 16 data points over the observation period, price range of 20%-93% indicates significant information arrival
Reliability: HIGH — strong volume, dramatic price movement consistent with confirmed data releases (Feb 2026 PPI and CPI reports), price trajectory aligns with BLS data showing PPI 3.4% vs CPI 2.4%
4. Independent Forecaster Opus · No market price · legacy v2 Did NOT see market price
Independent estimate: 90% (78% confidence)
sq1: Is PPI YoY currently above CPI YoY as of early 2026 (January-March 2026)?
92%
Base rate: In recent years with tariff/supply pressures, PPI has frequently exceeded CPI. February 2026 data is confirmed: PPI Final Demand YoY at 3.4% vs CPI-U YoY at 2.4%, a full percentage point spread. The January 2026 data isn't explicitly confirmed for PPI YoY, but given the trend (core PPI had 10 consecutive monthly advances, PPI goods up 1.1% in Feb), it's highly likely January also showed PPI > CPI. The spread is substantial enough (100bps) that minor revisions wouldn't change the direction. The only uncertainty is whether January specifically showed PPI > CPI (pushing down slightly from near-certainty) and whether March data (unreleased) will confirm. Given the strong momentum in PPI and moderate CPI, I estimate 92% probability that at least 2 of the first 3 months show PPI > CPI, with high likelihood all 3 do.
sq2: Will the PPI-CPI spread remain positive for at least 3 consecutive months in 2026 given current macro conditions?
88%
Base rate: Historical analysis suggests 44% of post-2000 years see 3+ consecutive months of PPI > CPI; in tariff years this rises to ~66%. Current evidence strongly pushes up from this base: (1) February 2026 PPI surged 0.7% monthly, beating forecasts by more than double (+5% shift up). (2) The spread is already 100bps (3.4% vs 2.4%), which is substantial enough to survive several months of convergence (+5% shift up). (3) Core PPI at 3.9% YoY with 10 consecutive monthly advances suggests persistence (+3% shift up). (4) All commodities PPI at +9.32% YoY indicates broad upstream pressure (+3% shift up). Potential downside: commodity price collapse could narrow spread (-3%), CPI could accelerate from shelter/services (-3%), tariff exemptions could ease PPI (-2%). Net: from 66% base, evidence pushes to ~88%. Even if February's surge partially reverses, the spread is wide enough that 3 consecutive months is very achievable - it likely only needs to hold through March or April to satisfy the condition.
sq3: Do historical patterns suggest PPI YoY exceeds CPI YoY for 3+ consecutive months in years with elevated tariff/trade disruption?
75%
Base rate from code execution: 66% of tariff-disruption years show this pattern. This is a structural/historical question. The 2018-2019 tariff period saw PPI frequently exceed CPI. The 2021-2022 supply chain crisis saw extended periods of PPI > CPI (PPI peaked at ~11% YoY while CPI peaked at ~9% YoY). The current 2025-2026 tariff environment under Trump's second term appears to be generating similar dynamics. The mechanism is clear: tariffs directly increase producer input costs before being partially absorbed by margins and partially passed through to consumers with a lag. This structural argument pushes the base rate up slightly to ~75%. The main uncertainty is whether the 66% figure from the code execution is well-calibrated, and whether 2026 tariff conditions are comparable to historical episodes.
Show full reasoning trace
base rate: Historical base rate of 44% in typical years, ~66% in tariff-disruption years. 2026 is clearly a tariff-disruption year.
evidence updates: February 2026 confirmed PPI 3.4% vs CPI 2.4% - a 100bps spread. PPI surged 0.7% monthly, core PPI at 3.9% with 10 consecutive advances. All commodities PPI at +9.32%. These collectively push probability well above the 66% base rate to ~90%.
combination method: Weighted average of sub-questions with upward adjustment for correlation and the low bar of 'any 3 consecutive months in 12'.
final: With a confirmed 100bps PPI-CPI spread in February 2026, strong PPI momentum, persistent tariff pressures, and only needing 3 consecutive months out of 12, the probability is approximately 90%. The main risk is a sudden PPI collapse (commodity crash) or CPI surge that closes the gap before any 3-month streak forms, but given the current wide spread and that we're already potentially 2 months into a streak, this is unlikely.
5. Devil's Advocate Sonnet · legacy v2 Market price revealed
Missing Info Reasoning Flaw Math Error
Challenges
  1. The question asks whether PPI YoY exceeds CPI YoY for 3+ consecutive months in 2026. The forecaster seems to treat January and February as likely already counting toward a streak, but January 2026 PPI YoY is explicitly flagged as 'not confirmed.' Without January data, we only have ONE confirmed month (February) where PPI > CPI. The forecaster's confidence that we're 'potentially 2 months into a streak' is insufficiently justified given this information gap.
  2. The combination method is vague — 'weighted average of sub-questions with upward adjustment for correlation and the low bar of any 3 consecutive months in 12' is not a rigorous mathematical combination. Sub-questions 1 (0.92), 2 (0.88), and 3 (0.75) are not independent, and averaging them would give ~0.85, not 0.90. The upward adjustment is not quantified or justified.
  3. The forecaster notes the question only requires 'any 3 consecutive months in 12' but doesn't properly account for the multiple opportunities this provides. If each month has, say, a 70% independent probability of PPI > CPI, the probability of at least one run of 3 consecutive months in 12 trials is very high (~95%+). However, months are NOT independent — a commodity crash or tariff reversal could flip multiple months simultaneously. The forecaster doesn't properly model serial correlation in the spread.
  4. There are significant information gaps about H2 2026 that could matter. Trump tariff policy is volatile — tariff exemptions, trade deals, or escalation could dramatically change the PPI-CPI dynamic. The 299 days until resolution means we need to consider scenarios well beyond Q1 2026. The forecaster is heavily anchored on current Q1 data without adequate consideration of how much can change in 10 months.
  5. The anomalous FRED CPIAUCSL YoY of +7.78% vs BLS-reported 2.4% is dismissed as a 'reporting issue' but not investigated. If CPI is actually higher than reported in these sources, it could narrow or eliminate the PPI-CPI gap. This should create more uncertainty than the forecaster allows.
  6. The 'tariff-disruption year' classification driving the 66% base rate is somewhat circular — the forecaster defines 2026 as a tariff year and then uses the tariff-year base rate, but the historical sample of tariff years is very small (essentially 2018-2019 and arguably 2021-2022 supply chain era), making the 66% figure unreliable.
Suggested adjustment: -2pp
The combination method is imprecise and the January 2026 PPI data gap is underweighted. However, the core logic is sound: a confirmed 100bps spread in February, strong PPI momentum, and 12 months of opportunities means even with some downward adjustment, the probability remains high. The small sample size for 'tariff year' base rates and lack of H2 2026 forward-looking data warrant slightly more uncertainty, but the structural case is strong. Adjusting from 0.90 to 0.88.
Market comparison: Forecaster: 90%, Market: 93%. The 3% divergence is small and well within reasonable uncertainty bounds. The market's slightly higher price may reflect January 2026 PPI data that traders have access to but isn't in the forecaster's evidence set, or simply reflects the multiple-opportunities-in-12-months dynamic more fully. The divergence is not concerning in either direction.
6. Aggregator Opus · final calibrated forecast
91% (78% confidence)
My independent estimate of 90% was based on confirmed February 2026 data showing PPI YoY at 3.4% vs CPI YoY at 2.4% (a 100bps spread), strong PPI momentum (0.7% monthly surge, core PPI at 3.9% with 10 consecutive advances), and the structural tailwind from 2026 tariff policies. The Devil's Advocate correctly identified that January 2026 PPI YoY is unconfirmed (Challenge 1) and that the combination method was imprecise (Challenge 2), which I partially accept — but the core logic remains strong given that even with only one confirmed month, the spread is wide enough and the structural drivers persistent enough that achieving 3 consecutive months out of 12 opportunities is highly likely. I reject Challenge 5 about the FRED anomaly, as the BLS-reported 2.4% CPI figure is the authoritative source. The market at 93% is only 3% above my estimate, well within convergence range; the slight gap likely reflects January PPI data available to traders or fuller pricing of the multiple-opportunities dynamic. I nudge slightly upward from 0.90 toward the market but retain modest skepticism about H2 2026 volatility from potential tariff policy reversals.