Prediction market traders expect July's consumer price index will be relatively tame, coming in below the Dow Jones consensus forecast.

Monday's odds on Kalshi show traders see a less than 55% likelihood that July's CPI reading comes in above 3.3% on a year-over-year basis. They see a 15% chance that CPI comes in hotter than 3.4%.

The event contract on Kalshi, asking what will be the year-over-year rate for July's CPI, will be verified by the Bureau of Labor Statistics.

In comparison, economists polled by Dow Jones see the headline inflation number coming in at 3.4%, slightly cooler than the 3.5% rate reported in June.

The CPI measures the average change over time in consumer prices for goods and services. It's a significant report for the Federal Reserve, which will consider the data when policymakers decide how to proceed on rates at their next meeting in September.

The annual inflation rate in June came at 3.5% which was less than the Dow Jones consensus estimate of 3.8%. June's CPI also fell 0.4% on a month-over-month basis, which was the biggest decline in more than six years thanks to a temporary drop in energy prices.

In a separate event contract, Kalshi traders see a 47% likelihood that July's core inflation rate, which excludes volatile food and energy prices, comes in above 2.4%. They see just an 11% chance that it is above 2.5%.

In comparison, the Dow Jones consensus estimate for core inflation calls for a 2.5% increase in July over the past 12 months. That compares to June's reading of 2.6%.

The Bureau of Labor Statistics will issue the CPI report on Wednesday morning.

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