How high will inflation get in 2026?

I do not have live CPI figures in this prompt, so this assessment uses structural macro factors, precedent through 2024–25, and plausible Fed and economic paths to form a probabilistic forecast. On the baseline path, the global and US economy entered 2024–25 with disinflation from the 2021–22 spike, central banks maintaining restrictive stances, and inflation expectations broadly closer to targets, which makes a return above 4% in any given month of 2026 an upside event rather than the central forecast. Economically, the 12‑month CPI rate is sensitive to month-to-month swings and base effects, so a run‑up above 4% can occur via either a sustained monthly acceleration or a sharp single‑month jump in headline components (notably energy and food) on top of a weak 12‑month base; absent such shocks the inertia in shelter and service components tends to slow headline moves upward. The Federal Reserve’s likely posture through 2025–26—if it remains restrictive or permits only gradual easing—reduces the probability of a large, economy‑wide demand surge that would push core and headline CPI broadly above 4%. Market pricing (Yes ~97.7%) implies near certainty of a >4% month in 2026, which looks inconsistent with the baseline macro outlook and historically rare nature of such reversals after sustained disinflation; that said, the high market price could reflect specific large participants hedging concentrated exposures or short liquidity rather than a consensus macro read. Balancing probabilities, I place about a one‑in‑four chance that a combination of adverse supply shocks (energy, geopolitics, weather), a materially weaker dollar, or unexpectedly strong wage and services inflation will push headline CPI above 4% for at least one month in 2026, while a continued gradual disinflation path makes the opposite outcome more likely.