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U.S. Federal Reserve researchers sing praises
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U.S. Federal Reserve researchers sing praises
U.S. Federal Reserve researchers sing praises of prediction markets
U.S. Federal Reserve researchers sing praises of prediction markets
A deep look at predictions on Kalshi called such platforms valuable to policymakers and researchers, according to a new Fed paper.
By Jesse Hamilton|Edited by Nikhilesh De
Feb 19, 2026, 5:01 p.m.
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U.S. Federal Reserve researchers are singing the praises of prediction markets as a tool of economic analysis.(Jesse Hamilton/CoinDesk)
What to know:
- Researchers at the U.S. Federal Reserve studied the economic grasp of the prediction markets, and they determined that the platforms represents a very useful analytical tool.
- The new research paper dove into prediction performance at Kalshi, praising it as producing accurate analysis and delving into areas for which data aren't otherwise available.
A research paper at the U.S. Federal Reserve praised the usefulness of prediction markets — specifically looking at Kalshi — in getting a real-time handle on economic policy.
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"Kalshi’s forecasts for the federal funds rate and [the U.S. Consumer Price Index] provide statistically significant improvements over fed funds futures and professional forecasters, all while providing continuously updated full distributions rather than infrequent point estimates," according to the paper published on Thursday.
And the markets, in which retail investors can buy contracts in virtually any yes-no question in such diverse fields as economics, politics and sports, are looking at topics on a live basis that other sources of information don't.
Prediction markets "provide unique insights — particularly for variables like [gross domestic product] growth, core inflation, unemployment and payrolls, for which no other market-based distributions currently exist."
And in this study, Kalshi predictions "perfectly matched the realized federal funds rate by the day of each meeting since 2022, a feat not achieved by either surveys or futures."
Part of the secret sauce that sets prediction markets apart as a useful tool may be the inclusion of retail participants, which makes them "distinct from institutionally dominated markets," the paper noted.
Economic dataPrediction MarketsKalshiFederal Reserve
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Fed's Neel Kashkari calls crypto 'utterly useless,' dismisses stablecoins as 'buzzword salad'
The Minneapolis Fed president said stablecoins don’t beat Venmo and argued crypto fails basic real-world tests.
What to know:
- Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, dismissed cryptocurrencies, including bitcoin and stablecoins, as "utterly useless" compared with the clear economic potential of artificial intelligence tools.
- Kashkari argued that stablecoins do not offer meaningful advantages over existing payment systems like Venmo for U.S. consumers and still face technical and conversion hurdles, especially for everyday purchases.
- His skepticism contrasts with the Trump administration, which has promoted bitcoin and regulated dollar-backed stablecoins as strategic tools to bolster the dollar’s global dominance and U.S. financial influence.
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