Inflation has been a central macroeconomic focus since 2021–2022 when year-over-year price growth peaked above 9 percent. The Federal Reserve has implemented aggressive interest rate hikes to cool demand and bring inflation toward its 2 percent target. This market asks whether inflation will exceed 3.5 percent in 2026—well above the Fed's long-term goal but well below the recent peaks. The 86 percent YES odds currently priced in suggest market participants expect inflation to remain sticky above the 3.5 percent threshold throughout 2026. The question will resolve based on the final year-over-year inflation reading, likely the December 2026 Consumer Price Index released in January 2027. The high conviction on YES reflects broader economic expectations that the transition from elevated inflation to the Fed's 2 percent target will be gradual, with inflation expected to stabilize in the 2.5 to 4 percent range. Recent months have shown inflation moderating from crisis peaks but remaining elevated relative to pre-pandemic norms.