Market expectations are diverging from the Treasury Department's upbeat view of the U.S. economy as investors assess growth and inflation signals for 2026. Kalshi traders assign a 14.2% chance that gross domestic product growth lands between 2.6% and 3.0%, pointing instead to a higher likelihood of a 2.1% to 2.5% outcome.
Highlights
- Kalshi traders assign only 14.2% odds to U.S. GDP growth reaching 2.6%-3.0% in 2026, favoring lower outcome probabilities.
- Treasury Secretary Scott Bessent maintains optimism for 3% growth, linking prospects to potential new Fed chair Kevin Warsh's policy mandate.
- Recent macro data show Q1 GDP up 1.6%, annual inflation at 4.2%—the highest in three years—while Kalshi traders doubt rapid progress on Bessent's '3-3-3' plan.
Growth outlook diverges from Treasury view
As reported by CNBC, Treasury Secretary Scott Bessent says the U.S. economy can post growth "with a three in front of it this year," while trading on prediction market platform Kalshi indicates limited confidence in that outcome.The Kalshi contract asks what the U.S. GDP growth rate will be in 2026 and resolves after the figure is verified by the U.S. Bureau of Economic Analysis. On the platform, traders currently give only 14.2% odds that growth will come in between 2.6% and 3.0%, while assigning a higher probability to a 2.1% to 2.5% range.
Bessent links his optimism partly to his view that a new Federal Reserve chairman, Kevin Warsh, will "satisfy the inflation and the growth mandate." In a live interview on CNBC's "Squawk Box," he says the underlying economy has been strong.
Inflation and policy targets shape expectations
Recent economic data present a mixed backdrop for that forecast. The consumer price index rises a seasonally adjusted 0.5% from April to May, while the annual inflation rate stands at 4.2%, according to the Bureau of Labor Statistics, marking the largest year-over-year gain in three years.GDP in the first quarter of this year rises 1.6% after 0.5% annual growth in the fourth quarter of last year. Overall, 2025 records a 2.1% increase.
Bessent also reiterates confidence in his "3-3-3" plan, which aims to lift GDP growth to 3%, reduce the budget deficit to 3% by 2028 and add 3 million barrels of oil production per day. Even with more time left to meet those targets, Kalshi traders do not appear to expect a quicker drop in the deficit-to-GDP ratio.
In our earlier report on the U.S. current-account deficit in Q1 2026, we noted that the gap widened to $226.8 billion as the primary income balance flipped from a surplus to a deficit. We also explained that although exports and income received increased, imports and income paid rose faster, leaving the external balance weaker while the U.S. net international investment position remained deeply negative.
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