Kalshi plans CPI futures for banks and hedge funds, aiming to become “the inflation exchange”
Kalshi is developing exchange-traded futures on US consumer prices, Bloomberg reported on 23 October, and is pitching them to banks and hedge funds for a launch as early as December. How the contracts would work, how they differ from Kalshi’s CPI event contracts, and why inflation futures have failed before.
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Kalshi wants to trade inflation like Wall Street does. The company is developing exchange-traded futures on the US consumer price index and is pitching them to large banks and hedge funds, Bloomberg reported on 23 October. People familiar with the plan told Bloomberg it is aiming for a launch in December, and Bloomberg reported that the futures would track both headline and core CPI. Kalshi confirmed it is developing the product but did not give a launch date.
How the contracts would work
According to documents reviewed by Bloomberg and reported by Finance Magnates:
- Maturities. Contracts for each of the next 12 monthly CPI readings, then May and November contracts for the following four years.
- Hours. Trading from Sunday to Friday.
- Clearing. Through Kalshi Klear, Kalshi's own clearing house, with the terms set by the exchange in advance.
- Distribution. Through the trading-technology firm Talos, block trades through Cantor Fitzgerald, and Kalshi's institutional platform.
The design draws on inflation trader Michael Ashton, who has worked with Kalshi since August as its CPI product partner. Ashton is a former Barclays trader known in the market as "the Inflation Guy".
How this differs from Kalshi's CPI markets
Kalshi already lists CPI markets, but those are event contracts: they pay $1 if inflation comes in above or below a set level in a given month, and nothing otherwise. A future would track the inflation rate itself over a chosen maturity, so a trader gains or loses in proportion to how far CPI moves. That is the kind of exposure banks, pension funds and hedge funds hedge today with inflation swaps and Treasury inflation-protected securities (TIPS).
Those are large markets. Bloomberg puts TIPS at about $2.2 trillion and the inflation-swap market at about $5.4 trillion. Most swap trading is bilateral: each institution needs a trading agreement with each counterparty. An exchange-listed future would let them trade through a clearing house instead.
Why inflation futures have failed before
Exchange-listed CPI futures have been tried for four decades and have not stuck. CME launched a CPI contract in 2004 and no longer offers it. Ashton has studied the earlier attempts, which he says failed on timing and contract design, and the new contracts build on specifications he developed with Allan Levin around 2012.
Unlike earlier attempts, Kalshi starts with an audience: its monthly CPI event markets already trade every month, and it runs its own clearing house. Whether that is enough to draw the banks and funds that trade inflation today is the open question.
Why it matters
This is Kalshi's latest push beyond yes-or-no event contracts and into products that compete with traditional futures exchanges. This month it launched a perpetual future on a US stock index, is waiting on CFTC review of one tied to the 10-year Treasury yield (Kalshi's perpetual contracts) and added sector KPI markets built on consumer data. It has also filed for a perpetual oil contract, which rival exchanges have urged the CFTC to block, Bloomberg reported on 22 October.
The pitch is to institutions, so retail traders may not see the futures at first. For now, Kalshi's monthly CPI and Fed decision markets remain the way most traders bet on inflation.
