Trump's Aggressive Stance: Powell's Peril & Zelenskyy's Odds
Recent Trump rhetoric shakes markets, but prediction markets show significant mispricings on his presidency, the Fed, and Ukraine's leadership.
President Donald Trump's recent declaration to hit Iran "extremely hard" within weeks sent ripples through global markets, deepening a bond selloff. This assertive posture, characteristic of Trump, is a crucial lens through which to view several key prediction markets currently showing significant misalignments.
The Fed Under Siege: Powell's Precarious Position
The markets are notably underpricing the likelihood of President Trump attempting to remove Federal Reserve Chair Jerome Powell. The contract "Will Trump try to fire Powell as Fed Chair or Governor before May 15, 2026?" is trading at a mere 12¢, implying a remote possibility. This valuation appears disconnected from reality.
Trump has a documented history of challenging the Fed's independence. His attempted removal of Fed Governor Lisa Cook in August 2025 serves as a clear precedent for his willingness to act. Furthermore, an active Justice Department probe into Powell, concerning a building renovation and including threats of indictment, offers a potential 'for cause' pretext. Given Trump's character, defined by confrontation and a refusal to back down, the 12¢ price for an attempt to fire Powell before May 15, 2026, is a substantial undervaluation. The longer-term contract, "Will Trump try to fire Powell as Fed Chair or Governor before 2027?", is also priced low, despite the increased timeframe for policy disagreements to escalate and legal avenues to be pursued.
Conversely, the market on "Will Trump end the Federal Reserve?" is significantly overpriced, trading at a 7% implied probability. This event is a near-political and legal impossibility. Abolishing the Federal Reserve requires an act of Congress, not presidential decree, and would trigger catastrophic economic instability. Trump's focus has consistently been on influencing the Fed's policy and personnel, not dismantling the institution itself. Traders should view the 'NO' side of this market as a strong opportunity, as the 7% implied probability is far too high for an outcome with no credible path to realization.
Zelenskyy's Future: Underpriced Risk in Kyiv
The stability of Volodymyr Zelenskyy's presidency in Ukraine is another area where prediction markets appear to be underpricing significant political risk. The market "Volodymyr Zelenskyy out as President of Ukraine before Oct 1, 2026?" is trading lower than its fair value, according to our analysis.
The single largest risk factor for Zelenskyy is a potential shift in U.S. foreign policy following the upcoming presidential election. A cessation of U.S. aid, a plausible scenario depending on the election outcome, would severely destabilize the Ukrainian government, potentially forcing Zelenskyy out of office. While Ukrainian law prohibits elections during martial law, making a democratic transition challenging, external pressures and internal instability could still lead to his departure. The current prices on these contracts do not adequately reflect the severe consequences of a U.S. aid cutoff, presenting an opportunity for those betting on a 'YES' outcome.
Trump's Tenure: Resignation Odds Inflated
Finally, the market "Will Trump resign during his term?" is significantly overpricing the probability of such an event. The 'NO' contract is trading at 76.0¢, implying a 24% chance of resignation. This valuation is highly inflated.
Historical precedent offers little support; only one U.S. president, Richard Nixon, has ever resigned, and that was under extreme pressure of impeachment and certain removal. Donald Trump's political character is defined by confrontation and a steadfast refusal to concede or back down. His entire career trajectory suggests he would fight any attempt to remove him, making resignation an unlikely personal or political choice. The 'NO' contract at 76.0¢ represents an attractive buy, as the true likelihood of Trump resigning is likely in the single digits.
Prediction markets offer unique insights into political probabilities. As Trump's assertive rhetoric continues to shape the geopolitical landscape, identifying these mispricings is crucial for navigating the evolving political terrain.
