From new movie reviews to key economic data, from the Federal Reserve's interest rate cuts to the US election... the prediction market is quietly rising.

On Monday, Interactive Brokers, founded by electronic trading pioneer Thomas Peterfee, will launch the forecasting platform ForecastEx to provide contract products based on key economic data. Forecast data includes weekly unemployment claim reports, monthly consumer confidence data, etc.

It's a coincidence. In April, Susquehanna International Group (SIG), a trading company co-founded by billionaire Jeff Yass, also set up a special team on the Kalshi platform to provide users with speculative opportunities on events such as the possibility that the Federal Reserve will cut interest rates.

According to reports, prediction contracts on the Kalshi platform usually only have two bets: “yes” or “no”. If correct, the platform will pay 1 US dollar/contract to individuals; if wrong, no payment is required. Before the contract expires, its price will fluctuate according to changes in market expectations.

Relevant data shows that since 2021, the number of new forecast contracts each year has exceeded the sum of the previous 15 years. Over the past year, the monthly trading volume of predictive contract products under SIG and Kalshi increased by 227%.

Steve Sanders, head of marketing and product development at Yingtou Securities, said:

“Hedge funds may use the ForecastEx platform to provide risk protection for their portfolios, and individual investors may also use it to predict the direction of economic indicators.”

However, as the forecast market heats up, regulators have also taken notice of this “new business.”

Some analysts pointed out that the forecasting market essentially also falls under the category of futures contracts, so it is regulated by the Commodity Futures Trading Commission (CFTC).

In May of this year, the CFTC announced a new rule prohibiting contracts based on political contests, award ceremonies, or sports competitions, which are deemed contrary to the “public interest.”

CFTC Chairman Rostin Behnam believes that these contract products with specific topics, especially political themes, are beyond the agency's scope of competence, and may even force regulators to “manipulate elections.”

However, currently, PredictIT is the only platform in the US that can provide contracts for predicting the US election; last year, Kalshi sued the latter because the CFTC prohibited it from providing contract products related to elections.