The market settles on the headline year-over-year CPI rate BLS publishes at 8:30 am ET on August 12.
Polymarket is offering 3.4% trades at 46%, 3.3% at 31%, and 3.5% at 17% in its market. Everything from 3.6% up is worth four cents combined. June printed 3.5%, so 77% of this board is paying for a second straight month of cooling.
June got there due to a few reasons: energy fell 5.7% on the month, and gasoline fell 9.7%, the largest energy drop since April 2020. The core was flat, and the core annual rate was 2.6%. Then the energy market turned. AAA's national average was $3.83 on July 2 and $4.12 on July 30, up 7.6% inside the month CPI is about to measure.
July Inflation Odds at Polymarket
This is based on year-over-year, so the math is tight. July 2025 added 0.2% to the index, so holding the annual rate at 3.5% takes a 0.2% month, 3.4% takes roughly 0.1%, and 3.3% takes a flat one. Gasoline alone is worth more than that gap before seasonal adjustment claws part of it back.
This market has been volatile, on July 30, BEA reported June PCE fell 0.1% with core up 0.1%, and $15,232 traded through the 3.4% contract that session, the heaviest day in the market's life. 3.4% went from 32.5 cents on July 29 to 47.5 by August 4. 3.3% fell from 36.5 to 29 on the same date.
So the board moved up the ladder on soft data, which is what happens when traders read June as a floor rather than a trend.
The 3.5% bracket did not get that treatment. It has been sold from 21.5 cents on July 31 to 17 now, over the same three days Brent held a $90 handle and AAA hit a fresh 2026 high.
Polymarket's CPI board is pricing the July energy line as though June's collapse carries forward.
There is a second gap worth naming. Core CPI is running at 2.6% while core PCE sits at 3.3%, a full point apart on two measures of the same thing, and the cheaper of the two is the one this ladder is extrapolating from.
The Iran truce that produced June's cheap barrel prices is already in the data. What follows it is a $90.74 Brent close on July 29 and a retail lag that puts the pump increase into July and August prints, not June's.
$351,650 has traded across this market, and $122,000 of it sits in the 3.3% and 3.4% contracts alone.
The Trade to Make
The 3.3% No at 70 cents is my favorite position right now. It needs a flat July to lose, and a flat July means gasoline up 7.6% at the pump nets out to nothing on the index, which is a lot to ask twice in a row. It wins on 3.4%, on 3.5%, on anything above.
The 3.5% Yes at 17 cents is the cheap, high upside leg to pair with it.
Not financial advice.
