# Kalshi Economics — Mispricing Audit — 2026-07-15

Date: 2026-07-15
Source: https://kalshi-audits.pages.dev/2026-07-15-kalshi-economics-mispricing-audit

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# Kalshi Economics — Mispricing Audit

2026-07-15 · v3.3 methodology · $2,500 capital · 45-day horizon · category-match mode (`Economics`)

Headline result: an unusually efficient week. Of 967 active Economics markets, 74 passed the liquidity screens, 16 got full diligence, and exactly one pick cleared every gate: BUY NO on July CPI >0.2% at 75¢ (MEDIUM conviction, $175 deployed, 7% of capital). The two largest modeled edges of the run — FOMC zero-dissents (+18¢) and the post-Hormuz gas ladder — were both rejected by the entry screens, not missed: the first is a coin-flip-band trade without a mechanical lock, the second repriced 70¢ in 48 hours and now trades above my model. 93% cash is the position.

## 1. How this was researched

**Mode:** category-match. `trading_events.category = 'Economics'` matched 967 active markets closing within 45 days, so no theme-keyword fallback was needed.

1. **Stage 1 filter** (read-only DB mirror): latest snapshot per market, cut to `volume24h ≥ 1500`, bid-ask spread ≤ 5¢, not fully priced (YES bid < 95¢, YES ask > 5¢) → 74 markets. Removed announcer-noise series (`KXFEDTWEETS`, `KXWEFTWEETS`), redundant deep-priced ladder legs, and the already-published pick `KXFEDDECISION-26JUL-H0` (plus its fully-priced sibling legs). 16 distinct candidates advanced.
2. **Stage 2 diligence:** full rules text from the mirror; 14-day intraday history from `market_snapshots`; live top-of-book from the Kalshi public API (quotes in this report were captured 2026-07-15 ~16:00 UTC); news diligence via four parallel research passes (gas/AAA, inflation/nowcasts, labor, Fed & GDP) grounded in primary sources — BLS releases, Cleveland Fed nowcast, Atlanta Fed GDPNow, Federal Reserve statements and speeches, AAA/GasBuddy, DOL claims data.
3. **Stage 2.5 resolver profiling:** every candidate's resolution source and mechanism named; resolver risks priced as explicit point deductions. One market (Chipotle burrito index) was rejected outright because its rules name _no resolution source at all_.
4. **Stage 3–3.5 screens:** conviction tier set by defensibility (never by EV); effective entry classified into bands — 60–90¢ favorites deployable, 35–60¢ coin-flips only for HIGH conviction with ≥15¢ edge, <35¢ tails hard-rejected (v3.2), LOW conviction never deploys (v3.3).
5. **Stage 4 sizing:** conviction-weighted, EV-agnostic. HIGH ≤ $375/pick (15%), MEDIUM ≤ $175/pick (7%), ≤ $375 (15%) per thesis cluster.

## 2. Markets reviewed

| Market | Ticker | Quote (Y bid/ask) | Verdict |
|---|---|---|---|
| July CPI MoM >0.2% | KXCPI-26JUL-T0.2 | 26 / 29 | PICK — BUY NO @ 75¢ (MEDIUM) |
| FOMC July: exactly 0 dissents | KXFOMCDISSENTCOUNT-26JUL-0 | 50 / 51 | Reject — coin-flip band, not HIGH (edge +18¢ logged) |
| Fed holds AND 0 dissents | KXFEDCOMBO-26JUL-0-0 | 45 / 46 | Reject — same cluster/band; cheaper twin of the above |
| Q2 GDP advance >2.0% | KXGDP-26JUL30-T2.0 | 47 / 48 | Reject — nowcasts split 1.3% vs 2.7% around strike |
| Jobless claims ≥210k (wk Jul 11) | KXJOBLESSCLAIMS-26JUL16-210000 | 57 / 59 | Reject — coin-flip band; repriced on retooling story |
| July payrolls >100k | KXPAYROLLS-26JUL-T100000 | 38 / 39 | Reject — weak-labor story already priced |
| June core PCE >0.2% | KXPCECORE-26JUN-T0.2 | 12 / 13 | Reject — fairly priced post-CPI/PPI |
| July CPI MoM >0.1% | KXCPI-26JUL-T0.1 | 43 / 46 | Reject — coin-flip band; T0.2 strike is the better expression |
| AAA gas >$4.00 on Jul 31 | KXAAAGASM-26JUL31-4.00 | 86 / 89 | Reject — repriced 13¢→89¢ in a week; ask > model |
| AAA gas >$4.10 on Jul 31 | KXAAAGASM-26JUL31-4.10 | 56 / 62 | Reject — no edge; 6¢ spread |
| AAA gas >$4.20 on Jul 31 | KXAAAGASM-26JUL31-4.20 | 34 / 35 | Reject — YES is a tail; NO edge ~2¢ with full war tail |
| AAA gas >$4.00 on Jul 20 | KXAAAGASW-26JUL20-4.000 | 61 / 62 | Reject — needs exactly the current pace; coin flip |
| AAA gas >$3.925 on Jul 16 | KXAAAGASD-26JUL16-3.925 | 54 / 59 | Reject — strike at the median of one overnight print |
| AAA gas >$3.930 on Jul 16 | KXAAAGASD-26JUL16-3.930 | 25 / 28 | Reject — NO costs 75¢ vs model 68 |
| Chipotle burrito avg ≥$9.78 (July) | KXCHIPBURRITO-26AUG02-T9.78 | 23 / 24 | Reject — rules name no resolution source (Stage 2.5) |
| Fed decision July (hold 0bp) | KXFEDDECISION-26JUL-H0 | 95 / 96 | Excluded — already an active published pick |

## 3. The pick

### Pick 1 — KXCPI-26JUL-T0.2 · BUY NO @ 0.75 · MEDIUM CONVICTION

_Will CPI rise more than 0.2% in July 2026?_ (BLS release Aug 12, 2026)

Current priceYES 26 / 29 → NO effective 74¢ (top 10 lots) / 75¢ (2,000 lots)
My probability (NO)81% vs market-implied ~74–75% → +6¢ edge at the 75¢ limit
Conviction / bandMEDIUM · 60–90¢ favorite band (effective entry 75¢)
Size233 contracts @ 75¢ = $174.75 (7.0% of capital — MEDIUM cap)
Clusterjuly-cpi-print ($175 = 7.0% < 15% cap)
Liquidity at entryvol24h 3,615 · OI 13,570 · 2,010 contracts fillable ≤ 75¢ · spread 3¢
Price historyWhipsawed 8¢ → 78¢ → 27¢ over Jul 7–15 (16.8k cum. volume); the collapse came on the Jul 14 CPI release.

**Resolver profile (Stage 2.5).** Resolver: BLS CPI-U headline, seasonally-adjusted MoM, single decimal, from the July 2026 CPI news release (Aug 12, 8:30 ET); "more than 0.2%" means a printed 0.3 or higher, i.e. ≥0.25 unrounded. Mechanism: snapshot of the first print. Priced risks: _−2 pts_ (rules say "the Consumer Price Index" without specifying SA — the series has consistently resolved on the SA headline, and the July NSA factor is slightly negative so both readings point the same way); _−1 pt_ (release-timing/shutdown risk — funding runs through Oct 1, so minimal). Evidence-based P(NO) 84 − 3 = **81**.

**Mispricing thesis.** The market is paying 26–29¢ for a hot July print in a month whose own best nowcast is roughly zero. The crowd sees $3.89 gas going to $4.15+ and prices energy passthrough; the rules pay on the month-over-month change in the _monthly average_, and July's average pump price will almost certainly sit _below_ June's, because June averaged ~$4.05 on the way down from the May 21 peak ($4.56) while July troughed at $3.796 on Jul 8. The headline-vs-arithmetic gap is the trade.

**Evidence.**

- Cleveland Fed inflation nowcast (updated 7/15, post-CPI and post-PPI): **July headline CPI −0.01% MoM**, July core CPI +0.21%.
- June CPI (BLS, released Jul 14): headline **−0.4% MoM** (largest drop since Apr 2020), core **0.0%**, shelter +0.1% (smallest since Jan 2021). June PPI (Jul 15): −0.3% headline, core ex-trade +0.1%. Momentum in core is soft, not hot.
- Gas arithmetic: AAA month-ago (Jun 15) $4.065 vs $3.890 today. Even at a sustained +2.5–3¢/day climb to ~$4.35 by Jul 31, July's monthly average (~$3.97–4.00) still lands 1–2% _below_ June's — a flat-to-negative SA gasoline contribution. A positive gas contribution needs AAA near **$4.60** by late July.
- Scenario math: a 0.3+ headline print effectively requires core ≥0.3 (vs 0.21 nowcast and 0.0 last month) _and_ energy to stop dragging. Weighted across core scenarios, P(YES) ≈ 15–20% vs 26–29% priced.

**Tail risks (cleanest way to lose first).**

- Extreme Hormuz escalation pushes AAA toward $4.50–4.60 by late July _and_ core re-accelerates to 0.3+ — the combination that prints 0.3. This is the single cleanest loss path; it needs both legs.
- Core surprise alone: tariff/chip passthrough (memory +17.4% YoY, Apple price hikes) re-firms core goods; June's 0.0 core was itself a big downside surprise and could mean-revert hard.
- The market moved on this thesis in the last 48h (78¢ → 27¢ post-CPI). My claim is that the residual 27% is still too high given the monthly-average arithmetic — the remaining edge is real but smaller, which is why this is MEDIUM, not HIGH.

**Numbers (for the record — did NOT drive sizing).** Edge +6¢/contract · EV +8% on cost · max payout $233.00 · expected value ≈ +$14 · worst case −$174.75.

## 4. Recommended $2,500 portfolio

| # | Ticker | Action | Limit | Contracts | Cost | % cap | Conviction | Band | Max payout | EV¢ | EV% |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 | KXCPI-26JUL-T0.2 | BUY NO | 75¢ | 233 | $174.75 | 7.0% | MEDIUM | 60–90¢ favorite | $233.00 | +6 | +8% |
| **Cash reserve** |  | **$2,325.25** | **93.0%** | Cash is a position — the category is efficient this week. |  |  |  |  |  |  |  |

**Totals:** deployed $174.75 (7.0%) · cash $2,325.25 (93.0%) · max payout $233.00 · blended EV +8% on deployed cost (≈ +$14 expected) · EV figures recorded for calibration only — sizing was set by conviction tier and entry band per v3.

### Cluster exposure

| Cluster | Cost | % of capital | Cap | Status |
|---|---|---|---|---|
| july-cpi-print | $174.75 | 7.0% | 15% ($375) | OK |
| aaa-gas-hormuz-spike | $0 | 0% | 15% | All 6 legs rejected |
| fomc-july-dissents | $0 | 0% | 15% | Both legs rejected (band screen) |

Correlation note: the pick is mildly _positively_ exposed to a Hormuz ceasefire (softer gas → softer CPI), the same direction as several already-published Hormuz NO picks in the live feed. It shares no cluster with them, and at $175 it cannot flip the run's sign.

### Conviction exposure

| Tier | Picks | Cost deployed | % of capital |
|---|---|---|---|
| HIGH | 0 | $0 | 0% |
| MEDIUM | 1 | $174.75 | 7.0% |
| LOW | 0 (never deploys, v3.3) | $0 | 0% |

### Risk profile

- **Worst case:** July CPI prints 0.3+ → −$174.75 (−7.0% of capital). No cluster can do worse; 93% is cash.
- **Best case:** CPI prints ≤0.2 → +$58.25 (+2.3% of capital).
- **Most likely:** Cleveland's ~0.0% nowcast holds within noise; the pick wins (~81%).
- **Concentration:** single thesis, single resolver (BLS), single date (Aug 12). By construction the book cannot lose more than 7%.

### Execution notes

- Rest a NO limit at 75¢ — 2,000+ contracts sit at that level (YES bid 25), so the fill is passive with ≤1¢ effective slippage from mid. Do not chase below 73¢-equivalent; at NO ≥ 78¢ the edge is gone.
- **Invalidation triggers:** (1) AAA national average ≥ $4.35 before Jul 24 (puts a positive July gas contribution in play) — exit or halve; (2) Cleveland July headline nowcast rises above +0.15% on any weekly update — exit; (3) a hot July core-goods datapoint (PPI passthrough news) — reassess.
- **Watchlist:** KXFOMCDISSENTCOUNT-26JUL-0 YES — if it drifts to ≤45¢ with no new dissent signals, the edge exceeds 20¢ and a fresh audit should re-examine it; also watch KXGDP-26JUL30-T2.0 after the Jul 16 GDPNow update, and the gas weekly ladder for post-ceasefire overreaction (the NO side becomes interesting only after a confirmed de-escalation headline, not before).
- No hedges needed at this size. Hold the cash; a 93%-cash week is the screen working, not a failure to find trades.

## 5. What I rejected and why

All 14 rejects below are machine-logged in `picks.json` and shadow-tracked to settlement — if they outperform the picks, the screen adds nothing and we want to know.

### Cut by the Stage-3.5 entry-band screen (the discipline on display)

- **KXFOMCDISSENTCOUNT-26JUL-0 YES @ 51¢ (model 69%) — the run's biggest modeled edge, +18¢, rejected.** The evidence is strong: June's meeting under new Chair Warsh was 12–0; serial dissenter Miran resigned May 14; Waller's own hike condition ("a hot core reading this week") failed when June core CPI printed 0.0; the hawks' April complaint (easing-bias language) was already fixed in the June statement. But 51¢ is the coin-flip band, which deploys only HIGH conviction with ≥15¢ edge — and a future 12-person vote three weeks out, with Bowman (dovish, predicted 3 cuts in 2026) and Hammack (publicly pro-hike) both plausible lone dissenters, is not "mechanically locked in." This is precisely the trade type that bled the v1/v2 book. Shadow-track it.
- **KXFEDCOMBO-26JUL-0-0 YES @ 46¢ (model 66%)** — same thesis wearing a different ticker (hold is 95%+ priced, so the combo ≈ the dissent market minus 5¢). Same band reject. Structural note for future runs: the combo is the cheaper expression of an identical claim.
- **KXJOBLESSCLAIMS-26JUL16-210000 YES @ 59¢ (model 66%)** — six straight prints ≥215k and a 215k consensus argue YES, but the price already fell 79→57 in 48h on the one genuine risk: Ford canceled its F-Series summer shutdowns and GM added Flint production days, so the seasonal factor expects an NSA retooling spike that won't fully arrive, biasing the SA print down. Coin-flip band, edge <15¢, thesis already moving the price.
- **KXGDP-26JUL30-T2.0 NO @ 53¢ (model 56%)** — GDPNow 1.3% vs NY Fed Nowcast 2.7% vs SPF 2.1%: the models straddle the strike almost symmetrically, and GDPNow updates Jul 16 (tomorrow). No forecastable edge; textbook coin-flip reject.
- **KXCPI-26JUL-T0.1 NO @ 57¢ (model 62%)** — same thesis as the pick but from inside the coin-flip band with less rounding margin. The T0.2 strike is the correct expression.
- **KXAAAGASD-26JUL16-3.925 YES @ 59¢ (model ~50%)** and **KXAAAGASW-26JUL20-4.000 YES @ 62¢ (model 53%)** — both strikes sit at the median of their forecast window ($3.89 today +2.5–3¢/day; De Haan's "$4.00 in 7–10 days" straddles Jul 20 exactly). Coin flips priced as favorites.

### Cut for no edge after the 48-hour repricing rule

- **KXAAAGASM-26JUL31-4.00 YES @ 89¢ (model 80%)** — the week's biggest story (Hormuz ceasefire collapse Jul 11–13, naval blockade, Brent +11%, RBOB +13.6%/month) moved this leg 13¢→89¢ in seven sessions. At 89¢ the ask now exceeds my model: mediators (Qatar/Oman/Pakistan) are active, and a ceasefire before ~Jul 22 leaves retail peaking near $4.00–4.05 and feathering back below the strike by Jul 31. The market didn't underreact — if anything it's now ahead of the fundamentals. NO is a sub-35¢ tail (hard reject band). No trade exists here.
- **KXAAAGASM-26JUL31-4.10 YES @ 62¢ (model 57%)** — pure ceasefire-timing bet, 6¢ spread, no edge.
- **KXAAAGASM-26JUL31-4.20 NO @ 66¢ (model 68%)** — +2¢ of edge against the full war tail (sustained blockade at +2.5¢/day reaches $4.29 by Jul 31). YES @ 35¢ is the tail band. Pass both ways.
- **KXAAAGASD-26JUL16-3.930 NO @ 75¢ (model 68%)** — negative edge, and the whole market is one overnight AAA update. Noise trade.
- **KXPCECORE-26JUN-T0.2 NO @ 88¢ (model 88%)** — crashed 68¢→13¢ on the Jul 14 CPI (core 0.0) and Jul 15 PPI (core ex-trade +0.1); Cleveland's post-data nowcast of 0.19% puts YES at ~12%, exactly where it trades. The market did my analysis first. Worth noting for calibration: 2026's base rate was 5-for-5 months above 0.2 before this.
- **KXPAYROLLS-26JUL-T100000 NO @ 62¢ (model 58%)** — June's +57k shock, negative revisions, and the shrinking labor force (−1.1M since January) all argue NO, but the market already moved there, and resolution is on the _first_ print, where 2026 first prints (148k/172k/57k) skewed high before revisions. No edge left.

### Cut at Stage 2.5 (resolver risk)

- **KXCHIPBURRITO-26AUG02-T9.78** — the full rules text is one sentence: "If the average U.S. price of a Chipotle Chicken Burrito for July 2026 is at least $9.78..." — _according to what?_ No source, no page, no feed is designated. An unpriceable resolver is an automatic reject regardless of the price.

## 6. Sources

- BLS June 2026 CPI (Jul 14): [bls.gov/news.release/cpi.nr0.htm](https://www.bls.gov/news.release/cpi.nr0.htm) · May CPI archive: [cpi_06102026.htm](https://www.bls.gov/news.release/archives/cpi_06102026.htm) · June PPI (Jul 15): [ppi_07152026.htm](https://www.bls.gov/news.release/archives/ppi_07152026.htm)
- Cleveland Fed inflation nowcasting (June core PCE 0.19%; July CPI −0.01%): [clevelandfed.org/inflation-nowcasting](https://www.clevelandfed.org/indicators-and-data/inflation-nowcasting) · FRED core PCE index: [PCEPILFE](https://fred.stlouisfed.org/series/PCEPILFE)
- AAA gas prices ($3.890 on 7/15; comps): [gasprices.aaa.com](https://gasprices.aaa.com) · AAA 7/9 note: ["Gas prices reverse course"](https://gasprices.aaa.com/gas-prices-reverse-course-and-start-rising-again/) · May spike pace: [AAA newsroom](https://newsroom.aaa.com/2026/05/national-average-rises-25-cents-for-second-straight-week/) · RBOB: [tradingeconomics.com/commodity/gasoline](https://tradingeconomics.com/commodity/gasoline) · De Haan outlook: [energynow.com (7/15)](https://energynow.com/2026/07/us-drivers-may-soon-see-pump-prices-climb-back-up-to-4-2/)
- Hormuz timeline: [Axios (blockade, 7/13)](https://www.axios.com/2026/07/13/trump-iran-blockade-strait-hormuz) · [Washington Times (toll walk-back, 7/14)](https://www.washingtontimes.com/news/2026/jul/14/trump-walks-back-planned-tolls-strait-hormuz-moves-reinstate-blockade/) · [Fortune (Brent +11%)](https://fortune.com/article/price-of-oil-07-14-2026/) · [CNN (refining capacity)](https://edition.cnn.com/2026/07/14/economy/oil-diesel-gas-iran)
- Federal Reserve: June 17 statement (12–0): [federalreserve.gov](https://www.federalreserve.gov/newsevents/pressreleases/monetary20260617a.htm) · April 29 statement (8–4, named dissenters): [federalreserve.gov](https://www.federalreserve.gov/newsevents/pressreleases/monetary20260429a.htm) · Waller speech (7/13): [federalreserve.gov](https://www.federalreserve.gov/newsevents/speech/waller20260713a.htm) · Bowman speech (5/29): [federalreserve.gov](https://www.federalreserve.gov/newsevents/speech/bowman20260529a.htm) · Warsh confirmation: [CNBC (5/13)](https://www.cnbc.com/2026/05/13/kevin-warsh-wins-senate-confirmation-as-the-next-federal-reserve-chair.html) · Miran resignation: [CNBC (5/14)](https://www.cnbc.com/2026/05/14/fed-governor-miran-submits-resignation-throws-support-behind-warsh-as-new-chair.html)
- GDP: Atlanta Fed GDPNow tracking (1.3%, Jul 8): [tracking slides](https://www.atlantafed.org/-/media/Project/Atlanta/FRBA/Documents/cqer/researchcq/gdpnow/RealGDPTrackingSlides.pdf) · NY Fed Nowcast (2.7%): [newyorkfed.org](https://www.newyorkfed.org/research/policy/nowcast) · SPF Q2: [philadelphiafed.org](https://www.philadelphiafed.org/surveys-and-data/real-time-data-research/spf-q2-2026) · Q1 advance: [bea.gov](https://www.bea.gov/news/2026/gdp-advance-estimate-1st-quarter-2026)
- Labor: FRED claims series: [ICSA](https://fred.stlouisfed.org/series/ICSA) · DOL weekly release: [dol.gov/ui/data.pdf](https://www.dol.gov/ui/data.pdf) · June jobs report: [CNBC (7/2)](https://www.cnbc.com/2026/07/02/jobs-report-june-2026-.html) · BLS Employment Situation: [bls.gov](https://www.bls.gov/news.release/empsit.nr0.htm) · Ford shutdown cancellation: [autoevolution](https://www.autoevolution.com/news/ford-cancels-the-summer-shutdown-ramps-up-production-instead-267910.html) · claims coverage: [Yahoo Finance (7/9)](https://finance.yahoo.com/economy/articles/u-weekly-jobless-claims-fall-134326066.html)
- Market data: Kalshi public API (api.elections.kalshi.com/trade-api/v2) and the read-only Kalshi DB mirror (trading_markets, trading_events, market_snapshots), quotes captured 2026-07-15 ~16:00 UTC.

Data: Kalshi live orderbook API + 5-minute snapshot mirror; news via primary sources linked above. All probabilities are subjective estimates committed before resolution; losing contracts resolve to $0 and any position can lose 100% of its cost. Rejects are logged and shadow-tracked. This report is part of a public performance track record (v3.3 methodology, auto-copy enabled) and is not investment advice.