Prediction Markets Today: Trump Exit Risk at 50%, Hassett Fed Chair Odds Rise, Bitcoin Bulls Fade at $150k

2026-01-12 | Daily Prediction Market Briefing

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> Prediction markets are pricing a coin-flip 50% chance that Donald Trump leaves office this year, even as no formal impeachment drive has advanced in Congress. Kevin Hassett leads the Fed chair sweepstakes at 38%, while Bitcoin traders give just 1% odds to the highest 2026 price tier despite long-term $150k forecasts. Macro models continue to signal low near‑term U.S. recession risk, with markets putting only a 2% chance on an NBER‑dated 2025 downturn.

Today's Topics

• Trump Administration Stability & Legal Challenges ➡️ 50.0% (0.0%): Despite no credible reports of resignation or new impeachment votes, the “Trump out this year?” market sits at 50%, reflecting a coin‑flip view on whether his second term is cut short in 2026 amid legal and political pressure.
• Federal Reserve Leadership & Monetary Policy ➡️ 38.0% (0.0%): With Jerome Powell still in place despite a DOJ criminal probe, markets put Kevin Hassett at 38% to be Trump’s next Fed chair pick, while odds of Powell leaving early remain around 1% and expectations for two rate cuts sit near 6%.
• Bitcoin Price Trajectory & Regulatory Policy ➡️ 1.0% (0.0%): Bitcoin trades near $90.5k, yet the top “how high will Bitcoin get this year?” bracket—tied to a ~$150k bull case—carries just about 1% implied odds despite multiple 2026 forecasts clustered around that level.
• 2025–2026 U.S. Economic Recession Risk ➡️ 2.0% (0.0%): Fresh Fed research and a subdued Sahm Rule reading keep near‑term recession indicators benign, and prediction markets price only about a 2% chance that 2025 ultimately gets tagged as a recession year, even as models put 25–35% odds on a downturn by late 2026.
• Trump-Era Government Reform & Agency Elimination ➡️ 1.0% (0.0%): Despite sweeping functional shifts and deep cuts at the Department of Education, the market assigning odds to its formal elimination before January 1, 2026 sits around 1%, underscoring that statutory abolition has not happened.
• Geopolitical Transparency: UFO/Alien Disclosure ➡️ 50.0% (0.0%): On the eve of a high‑profile House hearing on Unidentified Anomalous Phenomena and with new Pentagon reporting mandates in the FY2026 defense bill, traders are watching for volatility in UAP disclosure markets, though there is still no official U.S. confirmation of extraterrestrial life; the 50% probability here is a neutral placeholder, not live market pricing.
• Venezuela Political Instability under Maduro 📈 100.0% (+50.0%): With Nicolás Maduro captured in a U.S. operation and replaced on an interim basis by Delcy Rodríguez, any “Maduro out this year?” market has effectively moved to 100% and is shifting attention toward the timing and fairness of new elections.

Trump’s Second Term: Exit Risk High, Process Still Nascent

Key market: “Donald Trump out this year?” – 50% (flat)

There have been no credible reports in the past 24–48 hours that President Donald Trump has resigned, been removed from office, or faces a new impeachment vote in the House or trial in the Senate. The only active impeachment‑related developments are advocacy campaigns, not formal congressional action.

• On January 7, 2026, a coalition including Free Speech For People and Women’s March launched a renewed campaign to impeach, convict, and remove Trump and senior officials, citing the administration’s January 3 military strikes on Venezuela and prior unilateral actions. This is organized pressure, not a live removal process.
• A House resolution titled “Impeaching Donald Trump, President, for high crimes and misdemeanors” is on file at Congress.gov, alleging abuses including impoundment of funds, violations of privacy and security law, and unlawful termination of employees. There is no record of a new floor vote in the last 48 hours.
• Trump has continued to weaponize impeachment rhetorically, warning Republicans that losing the 2026 midterms would mean he will “get impeached” again, and even hinting in a recent appearance that the midterms could be canceled. These comments are driving commentary but do not reflect active legal proceedings.

Against that backdrop, prediction markets are remarkably split: the “Trump out this year?” contract trades around 50%, a coin‑flip on whether legal, health, or political shocks cut short his term before December 31, 2026. With no fresh procedural move in Congress, traders appear to be pricing event‑driven or exogenous risk rather than any visible, stepwise path to removal.

For now, headline risk—especially around Venezuela, DOJ investigations, or a surprise internal revolt—remains the main driver of this market rather than concrete constitutional processes.

Fed Watch: Powell Probe, Chair Shortlist, and Rate-Cut Skepticism

Key markets:

• Powell leaves before term end? – ~1%
• Trump next nominates Kevin Hassett as Fed Chair? – 38%
• Fed cuts rates exactly 2 times this year? – 6%

Jerome Powell’s status and DOJ probe

ABC News reporting indicates the Department of Justice has opened a criminal investigation into Jerome Powell, focusing on his testimony about large‑scale renovations of Federal Reserve buildings and whether that testimony intersected with the Trump administration’s pressure campaign on the Fed. Despite the political heat, there are no credible reports that Powell has resigned or is preparing to do so.

• Powell’s term as Fed chair runs to May 2026, with his governor term to 2028.

• As of today, prediction markets assign roughly 1% odds to Powell leaving early, reflecting that traders see the investigation as a headline risk, not yet a path to forced resignation or removal.

Trump’s 2026 Fed chair search

Treasury Secretary Scott Bessent has said Trump expects to name a new Fed chair this month to succeed Powell when his term ends in May 2026. Trump’s reported short list of four is:

1. Kevin Hassett – White House aide / NEC director

2. Kevin Warsh – former Fed governor and high‑profile Powell critic

3. Christopher Waller – current Fed governor

4. Rick Rieder – BlackRock Global Fixed Income CIO

Bessent indicated Rick Rieder is the last finalist to be interviewed, with a decision expected before or just after Trump’s Davos trip, and a formal announcement by the end of January. In prediction markets, Kevin Hassett currently leads with about 38% odds of being Trump’s next Fed chair nominee, with Kevin Warsh deeply discounted around low single digits in some Fed‑governor‑related markets.

This pricing suggests traders see the race as Hassett vs. an open field, rather than a tight Hassett–Warsh contest. Any credible leak of Trump’s preference or a surprise candidate would be highly market‑moving.

Policy path: skepticism on multiple cuts

While succession dominates headlines, markets remain cautious on the easing path. A contract on whether the Fed cuts rates twice this year is priced around 6%, reflecting skepticism that the central bank will deliver an aggressive cutting cycle in 2026 given still‑elevated inflation. With rate‑sensitive assets and the dollar tied closely to these expectations, upcoming inflation prints and Fed communications will be critical for repricing both the chair race and the policy path.

Macro Risk: Models and Markets Still Say ‘No 2025 Recession’

Key market: Will there be a recession in 2025? – 2%

On the data side, the latest official and research indicators continue to paint a picture of low near‑term U.S. recession risk as we enter 2026.

• A January 7, 2026 FEDS Note using state‑level data concludes that “national recession risk remains low by historical standards.” It looks at initial jobless claims, layoff data, the yield curve, and credit spreads, and finds no broad national signal of contraction—only pockets of elevated risk in a few states such as New York and New Jersey.

• The Sahm Rule Recession Indicator, updated with December 2025 data on January 9, stands at 0.35 percentage points, down from 0.43 pp in November and below the 0.50 pp threshold that would signal a recession has started.
• The Smoothed U.S. Recession Probabilities model (FRED) shows just 0.94% probability for November 2025 (0.90% in October, 0.72% in September), well under levels typically seen on the eve of downturns.
• Yield‑curve‑based estimates are more cautious: the New York Fed’s Treasury‑spread model (as of December 4, 2025) puts the probability of a U.S. recession by November 2026 at roughly 25%.
• In the private sector, J.P. Morgan Global Research assigns about a 35% chance of a U.S. and global recession in 2026, citing “sticky inflation” and policy uncertainty as key downside drivers.

Prediction markets are tightly aligned with the official indicators for the backward‑looking 2025 call: the “recession in 2025?” contract trades near 2%, implying traders see it as very unlikely that the NBER will ultimately date a recession start in 2025. Instead, the risk focus is shifting to late‑2026 and 2027, where models cluster around a one‑in‑three type probability of a downturn.

For traders, that split view—near‑term calm with medium‑term risk—is crucial for positioning in equities, credit, and the belly of the Treasury curve, as it favors carry trades in the short run but keeps demand for recession hedges such as out‑of‑the‑money equity puts and longer‑dated safe‑haven exposure.

Bitcoin: Bearish Charts vs. $150k Long-Term Narratives

Key market: How high will Bitcoin get this year? – top bracket around 1% odds

Bitcoin is trading around $90.5k–$90.6k, down from its October 2025 all‑time high of $126,198—about 28% below the peak. Over the weekend, technical analysts highlighted that BTC has broken below its 50‑week moving average for the first time since October 2023, a move many see as a bearish structural signal.

Recent technical work points to:

• A primary downside target near $74k, and an extended target around $68k, implying roughly a 25% drop from current spot if those lows are reached.
• An alternative road map in the same analysis that envisions a push to $98k–$99k before a “hard crash” into the $77k–$64k range over the next couple of months.

In contrast, medium‑term 2026 forecasts remain bullish:

• An FXEmpire 2026 outlook argues that strong institutional demand and a friendlier macro backdrop could “set the stage” for an upside move toward $150,000 in 2026, with a first technical waypoint near $112k based on an ascending triangle pattern.
• A retail‑oriented forecast from Changelly projects a 2026 trading range with a minimum around $130,516, average near $134,174, and maximum about $153,147, broadly consistent with a $150k bull target.
• Finbold cites an AI‑driven model (using ChatGPT) that also pegs a 2026 price target of roughly $150,000, suggesting the post‑halving cycle will be strong but less explosive than 2017 or 2021.

Despite these narratives, prediction markets remain skeptical about the very top of the range. Contracts tied to Bitcoin reaching the highest specified 2026 band (likely around $150k or above) trade at roughly 1%, implying traders see that extreme outcome as a long‑shot scenario.

Near term, the tug‑of‑war is between:

• Technical damage and the risk of a deeper correction to the mid‑$60ks–$70ks, and
• Structural demand from institutions and ETFs, plus the possibility of more accommodative Fed policy later in 2026.

Crypto‑policy risk from the Trump administration—such as talk of a potential U.S. national Bitcoin reserve—remains a wildcard narrative rather than a concrete policy path based on the last 48 hours of reporting, but any move in that direction would likely reprice both the upper‑range contracts and volatility across the curve.

Structural Shifts: Education Department, Venezuela’s Transition, and UAP Hearings

Department of Education: De facto downsizing, not formal abolition

Key market: Department of Education eliminated before Jan 1, 2026? – 1%

No new legislation has been enacted in the past 24–48 hours to abolish the U.S. Department of Education. Congress would need to pass a law to formally eliminate the department, and the latest “Massie bill” to do so—reintroduced in late 2025—has not advanced.

Instead, the administration continues to pursue an effective dismantling via restructuring:

• A November 2025 interagency plan shifted major functions, including the Office of Postsecondary Education and key K–12 programs, to the Departments of Labor, Health and Human Services, State, and Interior.
• Roughly 50% of Education Department staff have already been cut through reductions in force.
• The FY2026 budget proposal cuts around $12 billion (about 15%) from education, consolidates or eliminates multiple ESSA and IDEA programs, and zeroes out federal funding for Title III English Learner and Migrant Education programs.

Legal analysts and advocacy groups argue that using executive orders and interagency agreements to effectively dismantle the department, without explicit congressional authorization, is likely to face sustained litigation. Reflecting the legal and political constraints, the contract on the department being fully eliminated before January 1, 2026 trades around 1%, effectively confirming that statutory abolition did not occur by that date even as its footprint shrinks.

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Venezuela: Maduro removed, elections next?

Key market: Maduro out this year? – effectively 100% after his capture

Venezuela has entered a new phase of political upheaval:

• In early January, U.S. forces executed “Operation Absolute Resolve”, conducting large‑scale strikes on Caracas and capturing Nicolás Maduro, who was transported to New York to face U.S. federal charges including narco‑terrorism and cocaine importation conspiracy. Maduro has pleaded not guilty, calling himself a “prisoner of war” and insisting he remains president.
• Venezuela’s Supreme Court ordered Vice President Delcy Rodríguez to assume the presidency for 90 days after Maduro’s capture to ensure “administrative continuity,” and the military has recognized her as acting leader.
• U.S. Senator Tom Cotton has suggested Venezuela could hold new, free and fair elections in “a number of months,” while France’s foreign minister called Maduro’s departure “good news for Venezuelans” but criticized the U.S. use of force as breaching international law, and pressed for a peaceful, democratic transition with opposition figure Edmundo González playing a central role.

Given Maduro’s physical removal from power, any “Maduro out this year?” contract for 2026 has effectively moved to 100% and may already have resolved YES. Market attention is likely to pivot to election timing, recognition of a new government, and the impact on oil flows and sanctions.

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UAP/UFO disclosure: Big hearing, bounded expectations

A cluster of developments is keeping UAP (UFO) markets in focus:

• The House Oversight Committee will hold a hearing titled “Unidentified Anomalous Phenomena: Exposing the Truth” on January 13, 2026, featuring witnesses including Rear Admiral Tim Gallaudet (USN, ret.), former DoD official Luis Elizondo, former NASA associate administrator Michael Gold, and journalist Michael Shellenberger.
• A separate House Intelligence Committee session on January 8, 2026 followed whistleblower claims that the government has withheld information on UAP programs.
• The FY2026 National Defense Authorization Act (NDAA) includes new UAP provisions, requiring the Pentagon and NORAD/U.S. Northern Command to brief lawmakers on the number, location, and nature of UAP intercepts since 2004, amid reports of a “concerning spurt” of unexplained incursions near sensitive military and infrastructure sites.
• Public‑facing commentary has been reinforced by the 2025 documentary “The Age of Disclosure” and on‑camera remarks from Sen. Marco Rubio, who stated that UAP are “in fact, real,” while emphasizing that the key questions involve who controls them and why, not confirmed extraterrestrial origin.

Despite the elevated attention, there has been no official U.S. government confirmation of extraterrestrial life. Markets focused on “U.S. confirms aliens by 2026” therefore likely remain low‑probability, long‑dated bets, with volatility risk concentrated around tomorrow’s Oversight hearing and any unexpected classified‑to‑public disclosures that might follow.