Inflation May Have Peaked, but Core Prices Look Stubborn, Traders Say

Traders on prediction markets appear to believe the worst of the inflation surge is behind us for 2026. They are far less convinced that prices will cool quickly in the areas policymakers watch most closely.

The key distinction is between headline and core inflation. Headline figures include food and energy, which can swing sharply with weather, geopolitics, and fuel costs. Core inflation strips those categories out, giving a steadier read on underlying price pressure. It is the measure at the center of this debate, and it is the one traders expect to stay elevated.

The clearest sign of that caution is the price of contracts tied to core inflation falling to 2.2% this year. Prediction markets let people buy and sell contracts on specific outcomes, so a contract's price works as a rough gauge of how likely the crowd thinks an event is. A low price on that outcome suggests few participants expect the reading to get that low within the year.

Taken together, the view is split. Overall inflation may already have hit its high point, which would ease some pressure on household budgets. But the stickiness in core prices means relief could be slow, and that matters for interest rate expectations, since central banks pay close attention to core readings when setting policy.

It is worth reading this as a snapshot of trader sentiment rather than a forecast from economists. Market prices move quickly as new data arrives, and a single inflation report can reshape the outlook. Still, the message is fairly clear: the peak may be behind us, but the descent looks likely to be gradual.