Elon's Brazilian backtrack & other market updates - Kalshi's weekly forecast

Here’s a look at key Kalshi prediction markets offering insights for the week of Monday, September 23rd.

Back in April, a Brazilian court ordered X to ban accounts accused of spreading misinformation. Musk called the order an unlawful attack on free speech, and withdrew the company's legal representative in protest. As the months passed, the feud escalated, with Musk calling for the removal of Brazilian Supreme Court Judge Alexandre de Moraes and referring to him as "an evil dictator cosplaying as a judge." But it seems like Moraes' job is very secure. In late August, the judge banned the X platform in Brazil, as well as Musk's Starlink satellite internet service. Now, after weeks of bickering, Musk appears to have bent the knee to Moraes' demands and is complying with the court's orders. That's probably why Kalshi traders think there's only an 11% chance that Moraes will leave the court this year.

As we mentioned last week, the recent debate between Vice President Harris and former President Trump was seen as Harris' victory by all but the most ardent Trump supporters. Within hours of its finish, Harris had already proposed a third debate. However, Trump has repeatedly declined the invitation. Recently, Harris upped the ante by accepting an offer from CNN for a debate on October 23rd. While Trump continues to make excuses, such as claiming it's "too late" for another debate, Democrats are trying to paint him as a coward who is too "chicken" to face off against Harris. Will mocking the notoriously thin-skinned Trump work? Kalshi traders currently think there's only a 24% chance that we end up with exactly three debates.

At last week's FOMC meeting, the Federal Reserve made a 50 bps interest rate cut. According to Fed Chair Jerome Powell, the move was justified due to the Fed's greater confidence that inflation is moving sustainably toward 2%. However, Fed Governor Michelle Bowman cast the first dissenting vote since 2005, expressing concern that the public would view the cut as "a premature declaration of victory." Bowman also pointed out that "core personal consumption expenditures prices are still rising faster than 2.5% from 12 months earlier." This Friday, the August PCE report will be released, and a higher-than-expected reading could vindicate Bowman's vote. That said, Kalshi traders don't seem too worried about inflation. While we don't currently offer a PCE market, the current September CPI forecast predicts an increase of only 0.1%.

Last week we talked about how an end-of-the-month shutdown deadline has House Speaker Mike Johnson caught between a rock and a hard place. On the one hand, Republican Presidential Nominee Donald Trump, along with his most ardent congressional followers, is urging a shutdown if the SAVE Act, an election security bill, is not attached to a short-term funding bill. On the other hand, moderate Republicans, like Rep. Mike Garcia of California, think a shutdown right before the election would be a "galactically stupid" move that would cost the party seats. And it appears that Johnson agrees. Later this week, the House is likely to vote for a "bare-bones CR" that will not include the SAVE Act which is likely to win over the majority of Democrats. Kalshi traders think the resolution is likely to pass, and price the odds of a shutdown in 2024 at just 12%.

This Friday (September 27th), the wait is finally over for Francis Ford Coppola’s Megalopolis. And what a wait it's been. The film was first conceived by Coppola in 1977, but after various starts and stops, production did not begin until 2022, with Coppola funding the film himself with $120 million of his own money. But now that the film is finally here, can it possibly live up to its decades of hype? Well, if the reaction from its premiere at the Cannes Film Festival is any indication, the answer is no. The film divided critics, and it currently has a 52% fresh rating on Rotten Tomatoes (as of Tuesday morning). And as of now, Kalshi traders don't expect it to move much after its release.

Follow Terry Oldreal on X: @realoldterry

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