# Kalshi Economics — Mispricing Audit (3 Jun 2026)

Date: 2026-06-03
Source: https://kalshi-audits.pages.dev/2026-06-03-kalshi-economics-mispricing-audit-localtest

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# Kalshi Economics — Mispricing Audit

Category: **Economics** · Horizon: **45 days** (markets closing by 18 Jul 2026) · Capital: **$1,000** · Report date: **3 Jun 2026**

Prices as of the 3 Jun 2026 ~20:46 UTC mirror snapshot + live Kalshi orderbook pulls at write time.

**Bottom line.** The Economics shelf this window is dominated by deep, efficiently-priced US macro-data ladders (May jobs 5 Jun, May CPI 10 Jun, FOMC 17 Jun) where I hold **no informational edge** — and where the few discrete rate-decision markets (Brazil Copom, Banxico, FOMC dissent count) screen as **fairly priced or already repriced** on public news. After a five-candidate diligence sweep with an adversarial second pass, exactly **one thesis survived**: a low conviction bet that the multi-week AAA gasoline decline does not fully stall by 8 Jun. I deploy **$186 (19%)** across two legs of that single thesis and **hold $814 (81%) in cash**. This is a thin-opportunity week and I am not going to pad it.

## 1 · How this was researched

1. **Universe.** Queried the live Kalshi mirror for every `active` market whose event `category = 'Economics'` closing within 45 days: ~400 markets across 131 series.
2. **Liquidity screen.** Joined the latest `market_snapshots` row per market and cut everything with `volume24h < 1500`, bid-ask spread `> 5¢`, or already pinned (`YES bid ≥ 95` / `ask ≤ 5`). That left **39 liquid candidates**, clustered in a handful of series.
3. **Structure check.** Reconstructed the full price ladders for the mutually-exclusive / monotone sets (PAYROLLS, CPI, CPI-YoY, U-3, the central-bank decision trees, the gas ladders) and checked for monotonicity violations and leg-sum dislocations. **None** of the liquid legs were internally arbitrageable — these books are coherent.
4. **Diligence.** For the researchable discrete events I pulled the resolution `rules`, a multi-day intraday price history, the live depth-of-book, and primary-source news (central-bank statements, Focus/economist surveys, AAA/EIA data, Reuters/Bloomberg). Five candidate theses ran in parallel.
5. **Adversarial pass.** Every thesis that came back a _BUY_ was handed to a second analyst whose only job was to **refute** it — check whether the cited consensus was current, whether the Kalshi price had already moved to fair value, and whether a definitional trap could flip resolution. One BUY (FOMC dissent) **died on that pass**; one (gas) survived with conviction cut.

## 2 · Markets reviewed

Representative cut of the 39-candidate liquid screen and the verdict each reached. Prices are YES unless noted.

| Series / market | What it asks | Close | Px | Vol24h | Verdict |
|---|---|---|---|---|---|
| KXAAAGASW-26JUN08 | AAA US avg gas vs ladder, value on 8 Jun | 8 Jun | ladder | ~16k top | BUY NO ×2 legs |
| KXCBDECISIONBRAZIL-26JUN17 | Copom: Cut-25 vs Hold | 17 Jun | C25 57 / H 41 | 3.6k | PASS edge eaten |
| KXFOMCDISSENTCOUNT-26JUN-0 | Exactly 0 dissents at June FOMC | 17 Jun | 77 | 5.3k | PASS refuted |
| KXCBDECISIONMEXICO-26JUN25-HOLD | Banxico holds 25 Jun | 25 Jun | 93/97 | 0.8k | PASS efficient |
| KXAAAGASD-26JUN04 | AAA US avg gas, value on 4 Jun | 4 Jun | ladder | ~13k top | PASS well-priced |
| KXPAYROLLS-26MAY | May nonfarm payrolls ladder | 5 Jun | >100k 46 | 9.7k top | PASS = consensus |
| KXU3-26MAY | May U-3 unemployment ladder | 5 Jun | >4.3% 35 | 2.2k top | PASS = consensus |
| KXCPI-26MAY / KXCPIYOY-26MAY | May CPI MoM & YoY ladders | 10 Jun | >0.4% 73 | 9.4k top | PASS = consensus |
| KXFEDDECISION-26JUN-H0 | Fed holds at June meeting | 17 Jun | 96 | 91k | PASS pinned |
| KXCHAICUTS-26JUN04-T1 | AI = #1 cited reason in Challenger May report | 4 Jun | 92/94 | 4.7k | PASS ~priced + noisy |

## 3 · Picks — detail and thesis

Ordered highest-conviction first. Both deployed picks are the **same underlying thesis** (US gasoline keeps declining), expressed at two thresholds with different risk/reward. The concentration is intentional and flagged in the portfolio section — it is the only edge that cleared the screen.

The thesis, in one line. The AAA US national average for regular gas was $4.261 on 3 Jun, down from $4.290 the day before and ~$4.459 a week earlier — a steady ~2.8¢/day slide for three straight weeks as the May crude slump works through the ~1–2 week pump lag. The 8-Jun ladder prices a near-stall (implied ~$4.205, ≈1.1¢/day). If the decline merely continues at a fraction of its recent pace, the higher gas thresholds resolve NO.
 PICK 1 

### Pick 1 — KXAAAGASW-26JUN08-4.220 · BUY NO @ 0.61 · Low conviction

Market: **“AAA US avg regular gas > $4.220 on 8 Jun?”**Current NO ask: **61¢** (YES 39)Resolves **8 Jun 2026**

**Mispricing.** NO wins if gas settles **≤ $4.22** on 8 Jun — i.e. it needs to fall just **~4¢ over five days** versus an observed **~2.8¢/day** pace. The market still assigns **~42%** to gas being above $4.22 (a near-total stall). My forecast distribution (μ ≈ $4.19, σ ≈ $0.04) puts **true NO ≈ 73%**. The only path that loses is a fast crude-to-pump reversal — real, but less than 42% likely. This is the **most robust** expression: it pays unless the decline fully stalls.

**Evidence (all public):**

- AAA national average regular: **$4.261 (3 Jun)**, $4.290 (2 Jun), ~$4.459 one week prior — ~2.8¢/day decline, third straight week down. [gasprices.aaa.com](https://gasprices.aaa.com/); weekly series [finder.com](https://www.finder.com/economics/gas-prices).
- “Rockets & feathers” lag: the May crude drop (WTI ~$102→~$87) is _still_ feeding lower retail in early June; the June-3 crude bounce won't reach pumps until ~mid-June (after 8 Jun). [Advisor Perspectives, 2 Jun](https://www.advisorperspectives.com/dshort/updates/2026/06/02/gas-prices-drop-to-1-month-low).
- 8-Jun ladder implies ~$4.205 (≈1.1¢/day) — a deceleration the recent tape has not shown. The book is repricing toward NO (this leg's YES fell 73→58→47→~42 over 1–3 Jun) but still lags my estimate.

**Tail risk (the cleanest way this loses):** crude is _rebounding_ (Brent ~$97–101, WTI ~$95–96; Iran/Hormuz strikes, 6th weekly inventory draw) and GasBuddy's De Haan warns relief “may be short-lived” with price-cycling states “running out of room” — a near-term stall/reversal that keeps gas above $4.22. [Fortune, 3 Jun](https://fortune.com/article/price-of-oil-06-03-2026/).

True prob (NO)**~73%** · entry 61¢ · edge ≈ +12¢
Sizing200 contracts @ limit 0.61 → cost **$122**, max payout **$200**, EV ≈ +$24 (≈ +20%)
LiquidityNO fillable 61–62¢ for ~265 contracts before walking; spread 6¢ on the leg but depth adequate for this size.
Price historyYES leg drifted down 73 → 47 (1→3 Jun) as gas fell; no single ≥20¢ jolt — an orderly re-rate, not a spike.

 PICK 2 

### Pick 2 — KXAAAGASW-26JUN08-4.200 · BUY NO @ 0.43 · Low conviction

Market: **“AAA US avg regular gas > $4.200 on 8 Jun?”**Current NO ask: **42¢** (YES 58)Resolves **8 Jun 2026**

**Mispricing.** The higher-payout expression of the same view. NO wins if gas settles **≤ $4.20** (a ~6¢ fall, ≈ the market's _own_ implied median). At μ ≈ $4.19 this is roughly a **58% NO** proposition bought at 42¢ — a fatter edge but closer to a coin flip, because the strike sits right at the market's median. Included as a smaller, higher-beta sleeve of the gas thesis, not a second idea.

**Evidence:** identical to Pick 1 (same AAA trajectory, same crude lag). The distinction is purely where the strike sits relative to the forecast: $4.20 is the market's median, $4.22 is comfortably inside it.

**Tail risk:** same crude-rebound stall — and here it bites harder, since a settle of $4.20–$4.21 (a plausible deceleration outcome) resolves YES and this loses while Pick 1 still wins.

True prob (NO)**~58%** · entry 42¢ · edge ≈ +15¢
Sizing150 contracts @ limit 0.43 → cost **$64.50**, max payout **$150**, EV ≈ +$22.5 (≈ +35%)
LiquidityNO fillable 42–45¢; ~140 contracts at 42, ~400 more at 45. Rest at 0.43 and accept partials to hold slippage < 3¢.
Price historyYES leg 76 → 68 → 56 (1→3 Jun); same orderly decline.

No third pick. The remaining four candidates were rejected — see §5. Forcing a Brazil, Banxico, Fed or US-data trade here would mean paying for prices that already reflect the public information.

## 4 · Recommended $1,000 portfolio

| Pick | Side | Limit | Qty | Cost | Max payout | True p | EV $ | EV % | Conv. |
|---|---|---|---|---|---|---|---|---|---|
| KXAAAGASW-26JUN08-4.220 | NO | 0.61 | 200 | $122.00 | $200 | 73% | +$24.0 | +20% | Low |
| KXAAAGASW-26JUN08-4.200 | NO | 0.43 | 150 | $64.50 | $150 | 58% | +$22.5 | +35% | Low |
| **Deployed** |  |  | 350 | **$186.50** | **$350** |  | **+$46.5** | **+25%** |  |
| **Cash reserve** |  |  |  | **$813.50** | — |  | — | — | 81% |

Blended EV ≈ +25% on deployed capital; dollar edge ≈ +$46.50. Deployment is held to 19% by design.

### Risk profile

- **Worst case:** gas stalls / reverses above $4.22 by 8 Jun → both legs lose → −$186.50 (−18.7% of capital). The cash reserve is untouched.
- **Best case:** the decline continues → both pay → +$350 gross, +$163.50 net (+16.4%).
- **Most likely:** a partial decline — Pick 1 ($4.22 strike) wins, Pick 2 ($4.20 strike) is the coin flip. A settle in the $4.20–$4.22 band wins Pick 1 only (+$78 gross on it, −$64.50 on Pick 2 → roughly flat-to-slightly-positive).
- **Concentration:** 100% single thesis, single resolution date (8 Jun gasoline). These two legs are correlated, not diversified. That is the dominant risk and the reason size is capped low and conviction is labelled Low on both.

### Execution notes

- **Limit orders only.** Rest NO bids at 0.61 / 0.43; do not chase. AAA ladders thin out fast — fragment the order and accept partial fills rather than pay > 3¢ of slippage.
- **Cheaper / richer expressions of the same view:** the -4.180 leg (NO ~33¢) is the high-payout, lower-probability version (needs an ~8¢ fall); the -4.240 leg (NO ~76¢) is near-certain but only ~6¢ of edge. I chose $4.20/$4.22 as the best risk-adjusted middle. Size up the $4.22 leg from reserve only if gas prints another ≥2¢ daily drop on 4–5 Jun.
- **Watchlist trigger — Brazil Copom (KXCBDECISIONBRAZIL-26JUN17-C25):** if a hot May IPCA print (due **12 Jun**) or a renewed Hormuz/oil spike toward ~$114 Brent knocks Cut-25 back toward the low-40s, the easing-cycle base case becomes a buy. Not actionable at 57¢ today.
- **Invalidation:** close/avoid the gas legs if AAA posts a daily _increase_ on 4 or 5 Jun, or if WTI gaps and gasoline futures (RBOB) jump > 5% — that is the pump-lag breaking early.
- **Reserve:** the $814 cash is deliberate, not laziness — there is no second uncorrelated Economics edge this week worth owning, and the macro prints (5–10 Jun) may create cleaner post-release dislocations to redeploy into.

## 5 · What I rejected, and why

The screen is only as good as what it throws away. Four researched candidates and several whole series were cut.

### PASS Brazil Copom — Cut-25 KXCBDECISIONBRAZIL-26JUN17-C25 @ 57¢

The cleanest discrete edge on paper — and it **already moved**. Cut-25 repriced from ~31¢ (2 Jun) to a 79¢ intraday spike, settling ~57¢ on **3 Jun**, when Brent fell ~20% off its 2026 peak (US–Iran ceasefire optimism), clearing the ~$114 “pause” trigger that the May Copom minutes had flagged. My calibrated cut probability is ~63%; Polymarket independently sits ~65%. At 57¢ that is a ~6¢ edge — **below the 7¢ bar** — and the HOLD tail is genuinely live: 2026 IPCA expectations have climbed 11 straight weeks to **5.04%**, above the 4.5% ceiling, and the May IPCA print lands **12 Jun**, pre-meeting. Edge eaten, two-sided risk. [MercoPress 7 May](https://en.mercopress.com/2026/05/07/brazil-central-bank-cuts-selic-interest-rate-25-points-to-14.50) · [Boletim Focus via Rio Times](https://www.riotimesonline.com/brazil-focus-inflation-504-selic-1325-may-2026/) · [Polymarket](https://polymarket.com/event/bank-of-brazil-decision-in-june)

### REFUTED FOMC dissent count = 0 KXFOMCDISSENTCOUNT-26JUN-0 @ 77¢

This one came back a confident **BUY NO** (“the most divided Fed since 1992 won't vote unanimously”) — and the adversarial pass **killed it**. The load-bearing claim was a cross-check that “Polymarket prices 0-dissents at only ~46%, so Kalshi's 77¢ is an overshoot.” On inspection that 46% figure was a **stale page dated 21 May**; the _live_ Polymarket reads ~70% and has **converged** with Kalshi — no outlier. Worse, the April hawk dissents (Hammack, Kashkari, Logan) were over _easing-bias language_, not the rate vote, and that bias is likely dropped in June given the oil shock — removing their reason to dissent; and serial dissenter Miran **resigned** in May. Calibrated P(0 dissents) is ~60–65%, so NO at 24¢ carries only a fragile, model-dependent edge. **Textbook example of a thesis built on an out-of-date receipt.** Rejected. [Fed statement 29 Apr](https://www.federalreserve.gov/newsevents/pressreleases/monetary20260429a.htm) · [the stale 21-May page](https://octagonai.co/markets/economics/fed/who-will-dissent-at-the-june-2026-fomc-meeting/)

### PASS Banxico holds KXCBDECISIONMEXICO-26JUN25-HOLD @ 93/97

Tempting to fade a 96% favorite — but the primary sources back it. On **7 May** Banxico cut to 6.50% and issued its strongest hold guidance of the cycle (“the Board considers it appropriate to maintain the reference rate at its current level”), with BBVA and BofA framing it as the **final cut** and inflation still sticky (Apr headline 4.45%). Fair hold ≈ 93%; buying NO-on-HOLD at ~8¢ implies ~92% — about 1¢ of edge the _wrong_ way. No trade. [BBVA Research 8 May](https://www.bbvaresearch.com/en/publicaciones/mexico-banxico-delivers-final-cut-reinforces-prolonged-pause/)

### PASS The big US macro ladders — payrolls / U-3 / CPI

The deepest, most-traded Economics markets, and they sit **on top of published consensus**: May NFP implied median ≈ +85k vs the Reuters survey +85k; U-3 modal 4.3% vs consensus 4.3%; CPI MoM ~0.45% and YoY ~4.2% both consistent with the energy-driven step-up. The one apparent gap — a 0.27% Cleveland Fed CPI nowcast — is a **stale (5–7 May) artifact** that predates the May gasoline surge; the gasoline math (~+0.3pp to headline) actually validates the market's 0.45%. These books digest the 8:30 ET prints within minutes; any genuine edge is captured at release, not held by me three days out with a January knowledge cutoff. PASS on all four.

### PASS 4-Jun daily gas, and the noise markets

The KXAAAGASD-26JUN04 daily ladder is **well-calibrated** — its implied median (~$4.236) sits exactly one day's decline below today, so no defensible edge. Cut without deep diligence: announcer/“mention”-style and idiosyncratic single-name markets (Musk net worth, Fed tweets, Stripe/OpenAI IPO-by-date, tech-layoff counts) and the Challenger “AI = #1 reason” market (already ~93¢ and definition-sensitive) — these fail the “skip mention/noise” rule or offer no quantifiable edge.

## 6 · Sources

- AAA Fuel Prices — national & state daily averages: [gasprices.aaa.com](https://gasprices.aaa.com/); weekly history [finder.com/economics/gas-prices](https://www.finder.com/economics/gas-prices); trend note [Advisor Perspectives, 2 Jun 2026](https://www.advisorperspectives.com/dshort/updates/2026/06/02/gas-prices-drop-to-1-month-low).
- Crude oil (Brent/WTI, Iran/Hormuz): [Fortune, 3 Jun 2026](https://fortune.com/article/price-of-oil-06-03-2026/); [TradingEconomics — Brent](https://tradingeconomics.com/commodity/brent-crude-oil).
- Brazil Copom: [MercoPress, 7 May 2026](https://en.mercopress.com/2026/05/07/brazil-central-bank-cuts-selic-interest-rate-25-points-to-14.50); Boletim Focus via [Rio Times](https://www.riotimesonline.com/brazil-focus-inflation-504-selic-1325-may-2026/); [BCB Copom statements](https://www.bcb.gov.br/en/monetarypolicy/copomstatements); [Polymarket — Bank of Brazil June](https://polymarket.com/event/bank-of-brazil-decision-in-june).
- Banxico: [BBVA Research, 8 May 2026](https://www.bbvaresearch.com/en/publicaciones/mexico-banxico-delivers-final-cut-reinforces-prolonged-pause/); inflation data [TradingEconomics — Mexico CPI](https://tradingeconomics.com/mexico/inflation-cpi).
- FOMC: [Fed statement, 29 Apr 2026](https://www.federalreserve.gov/newsevents/pressreleases/monetary20260429a.htm); dissent context [CNBC, 1 May 2026](https://www.cnbc.com/2026/05/01/fed-dissenters-explain-no-votes-saying-they-disagreed-with-hinting-next-move-would-be-a-cut.html); Warsh confirmation [CNBC, 12 May 2026](https://www.cnbc.com/2026/05/12/senate-confirms-kevin-warsh-as-fed-governor-clears-way-for-chair-vote.html).
- US data consensus: jobs preview [Kiplinger](https://www.kiplinger.com/investing/economy/jobs-report-may-2026-what-to-expect); ADP [CNBC, 3 Jun 2026](https://www.cnbc.com/2026/06/03/adp-jobs-report-may-2026-payrolls-increase-by-122000.html); CPI baseline [BLS](https://www.bls.gov/news.release/cpi.nr0.htm).
- Market & orderbook data: Kalshi mirror DB (snapshots, rules) + live [Kalshi public API](https://api.elections.kalshi.com/trade-api/v2) orderbooks.

**Data sources:** live Kalshi mirror (`trading_markets`, `trading_events`, `market_snapshots`) for the universe, ladders and history; the Kalshi public API for depth-of-book at write time; web search/fetch for primary-source news. Prices captured 3 Jun 2026.

**Disclaimer.** Not investment advice. Every probability here is _subjective_ — my own estimate, not a market truth — and 5-day gasoline forecasting in particular has real variance. Prediction-market contracts resolve to **zero** when wrong; you can lose the entire stake on any position. Do your own diligence and size to what you can afford to lose.