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 2d 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 (2d 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

Ep 4 Ep 1

Episode 4·2026-03-25 – 2026-04-01·▼ 17%

Kill condition triggered — Trump de-escalated, confidence collapsed from 22% to 5%

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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