How likely is "US-Iran military conflict occurs and persists"?

Our causal model estimates 100% probability for this factor. This is driven by 3 sub-factors.

How likely is "Trump is dispositionally unable to de-escalate"?

Our causal model estimates 99% probability for this factor. This is driven by 4 sub-factors.

How likely is "Prolonged Iran conflict keeps oil prices elevated"?

Our causal model estimates 97% probability for this factor. This is driven by 3 sub-factors.

How likely is "Elevated oil prices increase US recession probability"?

Our causal model estimates 15% probability for this factor. This is driven by 3 sub-factors.

← Back to Theses

Can Trump De-escalate Iran Without Triggering Recession?

Updated 1d ago· Published Mar 14active

Current Assessment

Our causal model estimates 5% probability. Kalshi markets price the top related contract (Which countries will send warships through the Str) at 42¢, while our thesis implies 95¢ — a +53¢ edge. Across 89 tracked contracts, we see systematic mispricing.

Latest evaluation (1d ago): No material change. The only events are a minor 5¢ decline in a WTI tail-risk contract and generic X volume data — neither invalidates any thesis node nor shifts the core causal chain. Thesis confidence remains at 0.05, dominated by the unresolved weak link: the thesis requires Trump to be unable to

Thesis

Trump cannot exit the Iran war gracefully. His operating system does not support de-escalation. Each week the war continues, oil stays high, recession probability climbs, and Democrats gain ground for 2026 midterms.

Confidence

5% █░░░░░░░░░

Implied Return

+13.5%

Contracts

97tracked

Track Record

Hit Rate

48%of edges moved toward thesis

Edges Tracked

Avg Movement

+2.0¢

Confidence Over Time

Mar 14Mar 30

Implied Returns

Republican House seats after the 2026 midterm elections?: 215-2190.55¢→5.5¢+900%

Republican House seats after the 2026 midterm elections?: 210-2141.35¢→6¢+344.4%

What will WTI Crude Oil (WTI) hit in April 2026?: ↓ $8059¢→24.5¢+84.1%

Congress passes Iran war powers resolution by April 30?9¢→16.5¢+83.3%

Avg. # of ships transiting Strait of Hormuz end of April?: 10-2013.5¢→24.5¢+81.5%

What will WTI Crude Oil (WTI) hit in April 2026?: ↑ $12036.5¢→60¢+64.4%

Will no Fed rate cuts happen in 2026?23.8¢→39¢+63.9%

2026 Midterms: House Popular Vote Margin of Victory: Democrats 4-6%19¢→28¢+47.4%

Weekly Analysis

Episode 1·2026-03-14 – 2026-03-21·▼ 5%

Confidence swung from 87% to a high of 97% as Iran controlled Hormuz and oil broke $100, then crashed to 68% when OPEC surplus undermined the oil price mechanism, before recovering to 82% after US nuclear strikes and Qatar LNG facility attack confirmed sustained energy disruption.

Causal Model

Each factor has an estimated probability. Changes propagate through the tree to update overall confidence.

n1US-Iran military conflict occurs and persists100%██████████

n1.1US initiates kinetic military action against Iran by end of 2025100%██████████

n1.2Iran retaliates in ways that sustain the conflict100%██████████

n1.3Conflict lasts at least 8 weeks100%██████████

n2Trump is dispositionally unable to de-escalate99%██████████

n2.1Trump frames conflict in zero-sum terms publicly100%██████████

n2.2Hawkish advisors dominate decision-making98%██████████

n2.3Historical precedent: Trump has de-escalated before45%█████░░░░░

n2.4Domestic political incentives favor continued escalation95%██████████

n3Prolonged Iran conflict keeps oil prices elevated97%██████████

n3.1Strait of Hormuz disruption or credible threat100%██████████

n3.2Iranian oil exports drop significantly100%██████████

n3.3OPEC+ does not offset supply losses38%████░░░░░░

n4Elevated oil prices increase US recession probability15%██░░░░░░░░

n4.1Oil above $100 for 3+ months triggers consumer pullback96%██████████

n4.2Fed faces stagflation dilemma99%██████████

n4.3Baseline recession risk is already elevated100%██████████

n5War and recession benefit Democrats in 2026 midterms100%██████████

n5.1Public turns against Iran war within 6 months95%██████████

n5.2Economic conditions are the primary midterm driver100%██████████

n5.3Democrats gain net House seats in 202699%██████████

n5.4Democrats gain net Senate seats in 202660%██████░░░░

Market Edge Analysis

Contracts where market price diverges from thesis-implied value. Positive edge = market underprices this outcome.

	Contract	Market	Model	Edge	Spread	Depth (Bid/Ask)
P	Which countries will send warships through the Strait of Hormuz by April 30?: United StatesYES	42¢	95¢	+53¢	2¢	1K/2K
P	US escorts commercial ship through Hormuz by...?: April 15YES	18¢	70¢	+52¢	2¢	3K/327
P	Iran x Israel/US conflict ends by...?: December 31NO	80¢	30¢	+50¢	1¢	7K/43K
P	Iran x Israel/US conflict ends by...?: June 30NO	64¢	15¢	+49¢	2¢	6K/9K
P	Fed rate cut by April 2026 meeting?YES	2¢	50¢	+48¢	0¢	4K/611
P	US x Iran ceasefire before Trump visits China?NO	51¢	10¢	+41¢	2¢	760/537
P	Avg. # of ships transiting Strait of Hormuz end of April?: 0-10YES	37¢	75¢	+38¢	2¢	2K/336
P	Which countries will send warships through the Strait of Hormuz by April 30?: United KingdomYES	17¢	55¢	+38¢	2¢	3K/2K
P	Will 2 Fed rate cuts happen in 2026?YES	18¢	55¢	+38¢	1¢	31K/12K
P	US escorts commercial ship through Hormuz by...?: March 31YES	3¢	40¢	+38¢	1¢	824/413
P	US escorts commercial ship through Hormuz by...?: April 30YES	36¢	70¢	+35¢	1¢	627/2K
P	What will happen before Kevin Warsh is confirmed?: US x Iran CeasefireNO	40¢	8¢	+32¢	4¢	409/452
P	Will 1 Fed rate cut happen in 2026?YES	24¢	55¢	+32¢	1¢	9K/12K
P	Will 3 Fed rate cuts happen in 2026?YES	10¢	40¢	+31¢	1¢	67K/22K
P	Iran x Israel/US conflict ends by...?: May 15NO	38¢	10¢	+28¢	1¢	11K/6K

Settled Contracts

8 contracts resolved.

	Contract	Result	Model Said	Verdict
K	Will average gas prices be above $4.40?	NO	YES @ 50¢	✗ wrong
P	Fed rate cut by March 2026 meeting?	NO	YES @ 45¢	✗ wrong
K	Will average gas prices be above $4.50?	NO	YES @ 40¢	✗ wrong
P	Will 6 Fed rate cuts happen in 2026?	NO	YES @ 22¢	✗ wrong
P	Will 7 Fed rate cuts happen in 2026?	NO	YES @ 15¢	✗ wrong
P	Will 8 Fed rate cuts happen in 2026?	NO	YES @ 10¢	✗ wrong
P	Will 12 or more Fed rate cuts happen in 2026?	NO	YES @ 8¢	✗ wrong
P	Iran x Israel/US conflict ends by...?: March 31	NO	NO @ 2¢	✓ correct

Recent Evaluations

Automated analysis runs every 15 minutes. Major events trigger immediate re-evaluation.

Mar 30 03:455%(0%)

No material change. The only events are a minor 5¢ decline in a WTI tail-risk contract and generic X volume data — neither invalidates any thesis node nor shifts the core causal chain. Thesis confiden

Mar 29 11:155%(0%)

The single most important development is Trump halting Iran escalation after Gulf state pressure and claiming 'productive' talks — a pattern of tactical de-escalation that slightly weakens the core th

Mar 28 16:325%(+1%)

The single most important development is Trump actively signaling de-escalation and reportedly pausing Iran strikes — this is the most direct challenge to the thesis's core claim that Trump 'cannot ex

Mar 27 02:014%(-1%)

The single most important development is Trump's documented U-turn on Iran — reversing his ultimatum and embracing back-channel diplomacy per WSJ — which directly undermines the core thesis node (n2)

Mar 26 05:1612%(-3%)

The single most important development is Trump declaring the Iran war 'very complete' while simultaneously pursuing a 15-point peace deal and US forces escorting a tanker through the Strait of Hormuz

Mar 25 06:0132%(+15%)

KILL CONDITION ALERT: The Israel-Iran ceasefire and Trump's explicit de-escalation signals (pausing strikes on Iranian energy sites, confirming talks) directly invalidate the thesis's core claim that

Mar 24 06:3235%(-9%)

KILL CONDITION PARTIALLY TRIGGERED: Trump has publicly signaled de-escalation with Iran — halting strikes on Iranian power plants, citing 'productive talks' — which directly challenges the thesis's co

Mar 23 23:3148%(-25%)

KILL CONDITION TRIGGERED: Trump announced a Complete and Total Ceasefire between Israel and Iran, directly invalidating the thesis's central claim that 'Trump cannot exit the Iran war gracefully' and

Mar 22 20:1672%(-15%)

The major development is oil prices falling 20% in 2025 due to OPEC+ increasing output and global surplus from US, Brazil, Guyana, and Argentina. This directly undermines a critical causal chain in th

Mar 21 18:4785%(-3%)

Two pieces of news — WTI crude hitting six-month lows on recession fears and OPEC cutting its 2024 demand forecast — modestly weaken the oil-price-elevation leg of the thesis. These are tagged as 'neu

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