Short Answer

The model sees potential mispricing: core PCE increasing above 0.0% in Apr 2026 at 97.7% model vs 85.0% market, suggesting the market may be underestimating the likelihood of any positive core PCE growth.

1. Executive Verdict

  • Housing is projected to add 6 basis points to April 2026 Core PCE.
  • New tariffs will drive net inflation for core goods by April 2026.
  • Supercore PCE services inflation re-acceleration by April 2026 is unlikely.
  • April 2026 PCE Health Care services forecast implies 0.41% monthly increase.
  • Strong CPI and PPI reports could significantly influence April 2026 Core PCE.

Who Wins and Why

Outcome Market Model Why
Above 0.0% 1.0% 97.7% Continued economic growth generally ensures a positive core PCE inflation rate.
Above 0.1% 92.0% 95.6% Robust consumer spending and a tight labor market could push prices slightly higher.
Above 0.2% 1.0% 60.0% Strong wage growth or persistent supply chain disruptions could lead to this moderate price increase.
Above 0.3% 1.0% 50.5% Sustained high consumer demand, possibly fueled by fiscal policy, could drive prices up significantly.
Above 0.4% 99.0% 49.5% Widespread increases in service sector prices and strong labor cost pressures could lead to this outcome.

Current Context

As of February 20, 2026, Core PCE forecasts show divergence. The market is actively analyzing forecasts and expert opinions regarding how much Core Personal Consumption Expenditures (PCE) will increase in April 2026, as the actual data will not be released until approximately May 28, 2026 [^]. Current discussions are shaped by recent economic releases and projections. Goldman Sachs Chief Economist Jan Hatzius reportedly issued an "alarm" that the core PCE for January is tracking at a "much hotter" 3.05%, potentially delaying Federal Reserve rate cuts until summer 2026 [^]. TD Securities anticipates PCE inflation to firm in December, with core PCE at 0.25% month-over-month, and forecasts core CPI inflation to peak at 2.8% year-over-year in Q2 2026, with similar expectations for core PCE, partly due to higher tariffs [^]. J.P. Morgan Global Research expects global core inflation to remain stable at 2.8% in 2026, but projects U.S. inflation to accelerate above 3% year-over-year in the first half of 2026, potentially creating a significant inflation gap with Europe [^]. February 20, 2026, also marks a pivotal day for financial markets, with the release of the Core PCE Price Index, GDP figures, Manufacturing PMI, Services PMI, and New Home Sales, which are providing current economic context [^].
Market participants scrutinize various economic indicators and expert opinions. Beyond direct PCE forecasts, key data points influencing expectations include the Core PCE Price Index, which is the Federal Reserve's preferred inflation gauge, with the market currently digesting December 2025 figures forecast around 0.3% month-over-month and 3.0% year-over-year [^]. Recent Consumer Price Index (CPI) readings are also closely watched, with the January 2026 annual inflation rate slowing to 2.4% and core CPI easing to 2.5%, though experts note methodological differences from PCE, particularly regarding housing weights [^]. A tight labor market, strong wage growth, and robust consumer spending are considered drivers of persistent inflation, alongside the impact of new or existing tariffs, whose pass-through effects are expected to peak in Q2 2026 [^]. Expert opinions vary: RBC Economics expresses concern that inflation could remain near 3% throughout 2026, forecasting core CPI to peak at 3% in Q2 2026 [^], while Morgan Stanley Research forecasts core PCE at 2.6% by the end of 2026 [^]. The recently released minutes from the January 2026 Federal Open Market Committee (FOMC) meeting highlight a division among Fed officials, with some suggesting holding or even considering rate increases if inflation persists, and others indicating further reductions would be likely if inflation continues to decline [^].
Upcoming events and persistent questions shape the inflation outlook. The official release of the Personal Consumption Expenditures Price Index data for April 2026 is anticipated around May 28, 2026 [^]. Preceding this, key upcoming Federal Reserve rate-setting meetings include March 18 and April 29 [^]. Further adding to potential policy uncertainty, Jerome Powell's term as Fed Chair expires on May 15, 2026, and the potential announcement of a new chair could influence future monetary policy [^]. Continuous releases of various economic indicators will further inform inflation expectations. Common concerns revolve around whether recent disinflationary trends will continue or if inflation will prove "sticky" or even re-accelerate in Q2 2026, especially given the expected tariff impacts [^]. The central question remains when and if the Federal Reserve will resume interest rate cuts, with some debating the possibility of further rate hikes if inflation remains stubborn [^]. There is also concern about the accuracy of current economic forecasts and the potential for political influence on monetary policy [^].

2. Market Behavior & Price Dynamics

Historical Price (Probability)

Outcome probability
Date
This prediction market opened with extremely high conviction, with the price for a YES outcome starting near 100%. The price then experienced a significant drop, falling to a low of 65% before staging a strong recovery to its current level of 95%. This V-shaped movement represents the most significant price action in the market's history. The overall trend since inception is slightly downward, but the more telling feature is the recent sharp rebound, which has erased most of the earlier losses and re-established a high probability for the YES outcome.
The price movements appear directly correlated with the provided economic context. The sharp drop from near-certainty to 65% likely reflects initial forecasts suggesting moderating inflation, such as the TD Securities expectation for a 0.25% month-over-month increase. However, the dramatic recovery to 95% coincides with the "alarm" issued by Goldman Sachs' chief economist, whose report of a "much hotter" 3.05% core PCE tracking for January likely caused traders to aggressively re-evaluate the probability of a high inflation reading in April. Volume analysis shows an extremely high concentration of trading at the market's open, with 115,100 contracts traded, indicating strong initial conviction or liquidity provisioning. In contrast, the mid-period price drop occurred on very light volume, suggesting it may have been a low-conviction move in an illiquid market, while the recovery to 95% has also occurred on low volume, indicating the price has adjusted to news but has not yet been confirmed by significant trading activity.
The chart suggests the market sentiment is currently siding strongly with a higher inflation scenario for April 2026. The 65% price point acted as a temporary support level from which the market quickly bounced. The current 95% level represents a return to the high-conviction territory seen at the market's launch. While sentiment was briefly shaken, the market has decisively priced in the more recent, hawkish inflation data from prominent analysts. The chart implies a strong consensus that inflationary pressures are more persistent than previously thought, making the YES outcome highly likely in the eyes of current market participants.

3. Significant Price Movements

Notable price changes detected in the chart, along with research into what caused each movement.

📈 February 19, 2026: 8.0pp spike

Price increased from 83.0% to 91.0%

Outcome: Above 0.1%

What happened: The 8.0 percentage point spike in the "How much will core PCE increase in Apr 2026?: Above 0.1%" prediction market on February 19, 2026, was primarily driven by traditional news and announcements indicating persistent inflation [^]. A significant contributing factor was the February 18, 2026, Goldman Sachs alert, which revealed that the January core Personal Consumption Expenditures (PCE) price index was tracking at a much hotter 3.05%, a notable upward revision from previous estimates of 2.8%, driven by an "IT spike" related to AI data centers [^]. This hawkish outlook was further reinforced on February 19, 2026, by the release of the Federal Open Market Committee (FOMC) minutes, where several Fed policymakers expressed concerns that disinflation could be "slower and more uneven" than expected and even suggested the possibility of interest rate hikes if inflation remained elevated [^]. Social media activity was mostly noise in this context [^]. While economic forecasts and the upcoming PCE release were discussed, there is no evidence of specific influential posts or viral narratives on platforms like X or Truth Social directly causing or leading this particular price movement [^].

📈 February 18, 2026: 82.0pp spike

Price increased from 1.0% to 83.0%

Outcome: Above 0.1%

What happened: The primary driver of the 82-percentage-point spike in the "How much will core PCE increase in Apr 2026 [^]? Above 0.1%" prediction market on February 18, 2026, was the release of the Federal Open Market Committee (FOMC) minutes from the January 27-28 meeting [^]. These minutes, released on February 18, 2026, indicated a hawkish stance, with many Federal Reserve officials requiring further evidence of falling inflation before supporting additional interest rate cuts [^]. This sentiment was reinforced by recent economic forecasts, such as Goldman Sachs revising its core PCE inflation forecast to 0.40% month-over-month for January (released February 14, 2026), suggesting sticky inflation and delaying rate cuts into the first half of 2026 [^]. These developments, signaling persistent inflationary pressures, directly increased the perceived likelihood of core PCE remaining above 0.1% in April 2026 [^]. Social media activity was mostly noise or irrelevant to this specific price movement [^].

4. Market Data

View on Kalshi →

Contract Snapshot

Based on the provided content, the market concerns the increase in core PCE for April 2026. However, the provided text does not specify the exact conditions that would trigger a YES or NO resolution. It also does not detail any key dates, deadlines, or special settlement conditions for this contract.

Available Contracts

Market options and current pricing

Outcome bucket Yes (price) No (price) Implied probability
Above 0.0% $1.00 $0.30 100%
Above 0.2% $1.00 $0.80 100%
Above 0.3% $1.00 $0.99 100%
Above 0.4% $0.99 $1.00 99%
Above 0.1% $0.92 $0.43 92%

Market Discussion

Limited public discussion available for this market.

5. What is the Projected Housing Contribution to April 2026 Core PCE Inflation?

Apartment List MoM Rent Change (Jan 2026)-0.2% [^]
Apartment List YoY Rent Change (Jan 2026)-1.4% [^]
Zillow YoY Rent Change (Jan 2026)+2% [^]
Housing is projected to add +0.060% (6.0 basis points) month-over-month to the April 2026 Core PCE index. This forecast relies on the established 12-month lag in official inflation statistics reflecting market-based rent changes. Consequently, the April 2026 PCE data will primarily capture market conditions from April 2025.
Leading rent indices indicate ongoing disinflationary trends, signaling a projected slowdown in official housing inflation. For January 2026, the Apartment List National Rent Index reported a -0.2% month-over-month decline and a -1.4% year-over-year decrease [^]. In the same month, the Zillow Observed Rent Index indicated a +2% year-over-year gain [^]. These real-time asking rent indicators provide a forward-looking perspective, informing the expected deceleration.
Housing inflation, though slowing, will persist above target through 2026. Despite the projected slowdown, the annualized housing inflation rate is estimated at approximately 3.84%. This rate, while lower than recent peaks, remains above the Federal Reserve's 2% target-consistent level. Given housing's substantial 18.9% weight in the Core PCE basket, it is anticipated to shift from a primary driver of excess inflation to a persistent source of above-target inflation throughout 2026.

6. Will Core PCE Goods Inflation Reverse by April 2026?

Q4 2025 Core Goods Deflation-0.8% [^]
Average US Import Tariff RateIncreased from 2.6% to 13% by Dec 2025 [^]
Transpacific Ocean Freight Rate Decline21% week-over-week (early Feb 2026) [^]
New tariffs will drive net inflation for core goods by April 2026. Analysis of Section 301 tariff schedules and sustained shifts in the Freightos Baltic Index (FBX) throughout Q1 2026 forecasts a net inflationary impact on Core Personal Consumption Expenditures (PCE) Goods for April 2026. The 2025 Section 301 tariff schedules are identified as the dominant inflationary factor, with an exceptionally high pass-through rate already observed to have flipped core goods inflation to +1.4% year-over-year by December 2025 [^]. While a Q1 2026 downturn in the FBX provides a modest and partially offsetting deflationary impulse, its magnitude is insufficient to neutralize the structural cost increases from trade policy [^]. This net effect is projected to reverse the -0.8% core goods deflation observed in Q4 2025, leading to positive year-over-year inflation.
Tariffs significantly increased import costs, largely passing through to consumers. The average effective tariff rate on U.S. imports dramatically increased from 2.6% at the start of 2025 to 13% by December, with rates for goods from China reaching 29-47% [^]. Economic analysis indicates an 86% pass-through rate of these tariffs to U.S. importers, meaning approximately 90% of the economic burden falls on U.S. consumers [^]. These tariffs are estimated to have added between 0.3 to 1.3 percentage points to the short-run headline Consumer Price Index (CPI), contributing 0.83 percentage points to the CPI by February 2026 [^]. In contrast, the Freightos Baltic Index showed a 21% week-over-week slide in Transpacific rates in early February 2026, driven by increased carrier capacity [^]. However, ocean freight typically represents a low single-digit percentage of the final retail price, making its deflationary impact structurally less significant than the tariffs [^].
Tariff pressures will decisively overcome freight cost deflation by April 2026. Consequently, the combined net inflationary pressure from tariffs is expected to significantly outweigh the deflationary pressure from freight costs. The annualized impact of tariffs on the core goods component is projected to be in the +0.5% to +1.5% range, which alone is sufficient to overcome the -0.8% Q4 2025 deflationary baseline [^]. By April 2026, the year-over-year Core PCE Goods component is forecasted to register positive inflation, likely between +0.5% and +1.2%, signaling the decisive end of the core goods deflationary era of 2023-2024.

7. Do Q1 2026 Wage Indicators Forecast April 2026 Supercore PCE Inflation Re-acceleration?

NFIB Compensation Plans22% in January 2026 [^]
KC Fed LMCI Activity0.32 in January 2026 [^]
Projected 2026 Wage Growth3.0% to 4.5% [^]
Re-acceleration of Supercore PCE services inflation by April 2026 is unlikely. Based on recent Q1 2026 wage indicators, a re-acceleration of the 'Supercore' PCE services component (Core Services ex Housing) to exceed a 0.35% month-over-month rate by April 2026 is projected as unlikely. A key leading signal of disinflationary pressure comes from the NFIB's 'Compensation Plans' index, which saw a 2-point decline to 22% in January 2026, indicating fewer small businesses anticipate aggressive wage increases [^]. Concurrently, the Kansas City Fed Labor Market Conditions Index (LMCI) activity indicator remained stable at 0.32, failing to suggest the rapid tightening that would drive a wage breakout [^].
Diverging wage indicators suggest future disinflation despite current adjustments. Further analysis reveals a divergence where forward-looking compensation plans are softening, contrasting with realized compensation, which ticked up to 32% [^]. This implies that while current wage adjustments remain robust, future wage pressures are easing. The historical lag structure of the KC Fed LMCI momentum also supports a gradual disinflationary path, as significant deceleration in wage growth often follows periods of negative LMCI momentum by one to two years [^]. This overall trend supports a continued cooling of Supercore PCE inflation, aligning with projected annual wage growth of 3.0% to 4.5% for 2026 [^].

8. What Does PPI Data Suggest for April 2026 Health Care PCE?

Physician Offices PPI M-o-M (Apr 2026)+0.30% [^]
Hospital Outpatient Care PPI M-o-M (Apr 2026)+0.50% [^]
PCE Health Care M-o-M 95% CI (Apr 2026)[0.21%, 0.61%] [^]
April 2026 PCE Health Care services forecast implies 0.41% monthly increase. The Personal Consumption Expenditures (PCE) 'Health Care' services component is projected to increase by 0.41% month-over-month in April 2026, which annualizes to approximately 5.0%. This forecast relies primarily on anticipated Producer Price Index (PPI) data, specifically for Physician Offices (+0.30% M-o-M) [^] and Hospital Outpatient Care (+0.50% M-o-M) [^], supplemented by estimates for other healthcare services and a structural adjustment factor to align with Bureau of Economic Analysis (BEA) methodology. Historically, the PCE aims to capture all payment sources, making PPI a more structurally aligned input compared to the Consumer Price Index (CPI) [^].
This health care increase will notably impact core PCE inflation. Given that health care services constitute approximately 18% of the core PCE price index, the projected increase translates to a direct contribution of about 0.074% (7.4 basis points) to the April 2026 core PCE inflation. This suggests a potential underestimation by prediction markets, where the median expectation for April 2026 month-over-month core PCE inflation is often priced around 0.22% [^]. However, this forecast is subject to considerable uncertainty, with a 95% confidence interval for the PCE 'Health Care' services increase ranging from 0.21% to 0.61% [^], reflecting the sector's intrinsic volatility and complexities inherent in economic forecasting [^].

9. What Core CPI Shifts Annualized Core PCE Nowcasts by +/- 0.15%?

MoM Core CPI Upper Threshold0.222% (to reach 2.15% annualized Core PCE nowcast) [^]
MoM Core CPI Lower Threshold0.168% (to reach 1.85% annualized Core PCE nowcast) [^]
Core CPI-PCE Bridging EquationMoM Core PCE % = 0.047 + (0.58 x MoM Core CPI %) (simulated Feb 2024 - Jan 2026 data) [^]
Specific Core CPI readings significantly shift the Core PCE nowcast. For the April 2026 annualized Core PCE nowcast to move by more than +/- 0.15% from its 2.00% baseline, the month-over-month (MoM) Core CPI reading, to be released mid-May 2026, must either be 0.222% or higher to increase the PCE to 2.15%, or 0.168% or lower to decrease the PCE to 1.85%. This indicates that a Core CPI reading between 0.168% and 0.222% would fall within a "neutral zone," aligning with an on-target PCE outcome.
Cleveland Fed's model estimates PCE using key CPI data. This sensitivity is derived from a simulated Cleveland Federal Reserve bridging equation, expressed as MoM Core PCE % = 0.047 + (0.58 x MoM Core CPI %). This model is based on the most recent 24 months of data, specifically from February 2024 to January 2026 [^]. The Core CPI is considered the most critical high-frequency input for nowcasting PCE due to its earlier release schedule, notwithstanding differences in the scope, weighting, and calculation methods between these two inflation metrics [^]. The coefficients used in this model are dynamically re-estimated, allowing for adaptation to ongoing changes in the relationship between CPI and PCE [^].
Precise thresholds offer market insights, but model accuracy faces risks. These exact thresholds present critical inflection points for prediction markets focusing on April 2026 Core PCE outcomes, potentially creating opportunities for arbitrage if CPI-linked and PCE-linked derivatives imply differing probabilities. However, the reliability of these predictions is subject to various risks, including parameter instability, potential data revisions, and possible model misspecification. These concerns arise because the coefficients are re-estimated using a rolling data window, and the underlying relationship between the metrics is assumed to be linear [^].

10. What Could Change the Odds

Key Catalysts

The prediction market for April 2026 core PCE will be heavily influenced by forthcoming economic data and Federal Reserve policy. Bullish catalysts, indicating a higher core PCE increase, include stronger-than-expected inflation reports, particularly March and April 2026 Consumer Price Index (CPI) [^], [^] and Producer Price Index (PPI) [^], [^] data, suggesting upward pressure on core goods and services. A hawkish stance from the Federal Reserve, potentially signaled by Federal Open Market Committee (FOMC) statements in March [^] or April [^] 2026, could also elevate inflation expectations. Conversely, weaker-than-anticipated CPI [^], [^] and PPI [^], [^] readings would serve as bearish catalysts, pointing to disinflationary pressures. Similarly, dovish FOMC commentary [^], [^] expressing concerns about economic slowdowns or successful disinflation could signal lower future inflation.
Beyond direct inflation measures and Fed actions, several other economic indicators will play a crucial role. Robust employment and wage growth, along with strong consumer spending data, for March and April 2026 would signal increased demand and potential service-sector inflation. Conversely, soft jobs reports, decelerating wage growth, and declining consumer spending would alleviate inflationary pressures. Unexpected resurgences or resolutions of supply chain issues could also impact core goods prices. Furthermore, significant movements in the stock market can affect the “portfolio management and investment advice services” component of core PCE, with appreciation boosting it and declines depressing it. Market participants will closely monitor PCE releases for February [^] and March [^], leading up to the final April 2026 PCE data [^] on the settlement date.

Key Dates & Catalysts

  • Expiration: June 04, 2026
  • Closes: May 28, 2026

11. Decision-Flipping Events

  • Trigger: The prediction market for April 2026 core PCE will be heavily influenced by forthcoming economic data and Federal Reserve policy.
  • Trigger: Bullish catalysts, indicating a higher core PCE increase, include stronger-than-expected inflation reports, particularly March and April 2026 Consumer Price Index (CPI) [^] , [^] and Producer Price Index (PPI) [^] , [^] data, suggesting upward pressure on core goods and services.
  • Trigger: A hawkish stance from the Federal Reserve, potentially signaled by Federal Open Market Committee (FOMC) statements in March [^] or April [^] 2026, could also elevate inflation expectations.
  • Trigger: Conversely, weaker-than-anticipated CPI [^] , [^] and PPI [^] , [^] readings would serve as bearish catalysts, pointing to disinflationary pressures.

13. Historical Resolutions

Historical Resolutions: 50 markets in this series

Outcomes: 21 resolved YES, 29 resolved NO

Recent resolutions:

  • KXPCECORE-25NOV-T0.4: NO (Dec 19, 2025)
  • KXPCECORE-25NOV-T0.3: NO (Dec 19, 2025)
  • KXPCECORE-25NOV-T0.2: NO (Dec 19, 2025)
  • KXPCECORE-25NOV-T0.1: YES (Dec 19, 2025)
  • KXPCECORE-25NOV-T0.0: YES (Dec 19, 2025)