Fed Research: Kalshi Data Could Serve as New Policy Reference

Kalshi Data Could Help the Fed Navigate Policy Decisions

Three Federal Reserve researchers recently published a paper suggesting that data from the prediction market platform Kalshi can offer faster and more granular insights into macroeconomic trends than traditional methods. They propose considering it as part of the Fed’s decision-making framework.

The Edge of High-Frequency Data

Kalshi’s key strength lies in its ability to provide high-frequency, real-time updates. According to the study, the platform quickly recalibrates expectation probabilities following major policy announcements or economic data releases, offering policymakers a more dynamic perspective.

Comparison with Traditional Methods

The researchers compared Kalshi’s data with conventional survey-based expectations and found that Kalshi delivers continuously updated probability distributions, particularly excelling in tracking risk-neutral probabilities for key indicators such as interest rate decisions.

Research as Internal Discussion

It is important to note that the paper is an internal research document and does not reflect the official stance or policy direction of the Federal Reserve.