Today's Prediction Markets: Warsh Fed Pick Seen as Near-Lock, Shutdown Odds Stay High, Bitcoin Moonshot Fades

2026-02-04 | Daily Prediction Market Briefing

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> Prediction markets are almost all‑in on Kevin Warsh as Trump’s next Federal Reserve Chair, with alternative candidates left in the single digits. Macro pricing points to a soft landing, with only 6% odds on two Fed cuts in 2026 and 1% on a 2025 recession, even as traders see an 80% chance the U.S. government was shut down on January 31. Geopolitical risk remains in focus with Iran succession markets near a coin toss and only long‑shot odds assigned to a Bitcoin surge toward headline-grabbing levels.

Today's Topics

• Trump's Potential Fed Chair Nominee: Kevin Warsh ➡️ 97.0% (0.0%): Markets are assigning a 97% probability that Trump’s next Federal Reserve Chair nomination will be Kevin Warsh, leaving rival Kevin Hassett at just 7%.
• 2026 Fed Rate Cut Expectations and Recession Risk ➡️ 6.0% (0.0%): Prediction markets put the chance of the Fed cutting rates twice in 2026 at just 6%, with only 1% odds on a 2025 recession, signaling strong confidence in a soft landing.
• Succession Uncertainty for Iran's Supreme Leader ➡️ 56.0% (0.0%): A key market on leadership succession in Iran prices the odds of a change at 56%, reflecting elevated but highly uncertain geopolitical risk.
• Imminent US Government Shutdown Risk ➡️ 80.0% (0.0%): Traders see an 80% chance that the U.S. federal government was shut down on January 31, underscoring persistent fiscal brinkmanship.
• Bitcoin's 2026 Price Trajectory and Catalysts ➡️ 1.0% (0.0%): Markets give just 1% odds that Bitcoin reaches its top target range this year (e.g., around $150k), despite ongoing attention to post‑halving dynamics, ETF flows, and regulation.
• Supreme Court Case: V.O.S. Selections, Inc. v. Trump ➡️ 0.0% (0.0%): An active market is trading on the outcome of the Supreme Court case V.O.S. Selections, Inc. v. Trump, but specific pricing levels were not provided in today’s data.
• Potential Release of Epstein-Related Documents ➡️ 0.0% (0.0%): Markets continue to speculate on whether Epstein-related documents will be released, though today’s feed does not include an explicit probability quote.

Fed Chair Race and Macro Outlook: Markets Almost All-In on Warsh

As of 4 February 2026, prediction markets are signaling near-certainty that Kevin Warsh will be Trump’s next nominee for Chair of the U.S. Federal Reserve.

• Warsh nomination probability: 97%
• Kevin Hassett as alternative nominee: 7%
• Jerome Powell leaving before 2026: 1%

This pricing structure implies traders see very little room for a late-breaking alternative to Warsh and expect a conventional transition rather than an abrupt early exit by Powell.

On the broader macro path, markets are skewed toward a soft-landing narrative:

• Probability the Fed cuts rates twice in 2026: 6%
• Probability of a U.S. recession in 2025: 1%

The 1% pricing on a 2025 recession suggests that, with the year now over, traders largely expect that any eventual NBER dating will confirm no official recession in 2025. At the same time, only 6% odds on two rate cuts in 2026 indicate expectations for gradual or limited easing, rather than an aggressive cutting cycle typically seen in downturns.

With no new public reporting in today’s feed on Warsh or Fed policy, these levels appear to reflect positioning inertia rather than a reaction to fresh headlines. Any credible sign Trump might reconsider his Fed shortlist—or any significant upside or downside surprise in incoming economic data—would likely trigger sharp repricing from these currently one-sided markets.

Source: Internal prediction market pricing data as of 4 Feb 2026 (Warsh nomination 97%, Hassett 7%, Powell leaves before 2026 at 1%, 2026 two-cut scenario at 6%, 2025 recession at 1%).

Fiscal Brinkmanship and Legal Overhang: Shutdown Odds High, Court Case in Focus

Fiscal risk remains prominent in prediction markets, centered on the question of whether the U.S. federal government was shut down on 31 January 2026.

• Probability government was shut on 31 Jan 2026: 80%

With the date now passed, an 80% price effectively reflects trader conviction that either a shutdown did occur on that date or that the formal resolution of the market will confirm that status. The remaining 20% embeds residual uncertainty about the exact legal and operational definition of “shutdown” that will be applied at settlement, as well as any last‑minute deals that may have been struck.

In the legal sphere, markets are also trading on the outcome of _V.O.S. Selections, Inc. v. Trump_, a case pending before the U.S. Supreme Court. While today’s data do not include a quoted probability, trading interest is described as significant, reflecting concern that the ruling could influence:

• The scope of executive power;
• Election-related procedures or standards; and
• Future litigation involving Trump or similar fact patterns.

The combination of a high‑odds shutdown scenario and a high‑stakes Supreme Court case underscores that policy and legal tail risks remain material for U.S. assets, even as macro markets price in relative calm.

Source: Internal prediction market pricing data as of 4 Feb 2026 (U.S. government shutdown on 31 Jan 2026 at 80%; V.O.S. Selections, Inc. v. Trump active but specific pricing not provided in today’s feed).

Geopolitical Risk: Iran Succession and Sensitive Disclosures

Geopolitical markets are focused on Iran’s leadership trajectory and the possibility of high‑profile document releases.

Iran succession risk

A key market on the succession to Supreme Leader Ali Khamenei is trading with:

• Probability of a leadership change (succession) within the market’s time frame: 56%

At roughly a coin toss, this pricing encapsulates the binary and opaque nature of Iranian elite politics. Traders are effectively saying a transition is slightly more likely than not over the specified horizon, but with substantial uncertainty given limited reliable public information on Khamenei’s health, internal factional dynamics, and the mechanics of the Assembly of Experts’ decision-making.

This market matters for:

• The trajectory of Iran’s nuclear program and negotiations;
• Regional security in the Gulf and Levant;
• Potential volatility in oil markets, particularly around any leadership transition shock.

Notably, today’s feed contains no new newsflow on Khamenei’s condition or formal succession planning, so the 56% pricing should be read as a medium‑term risk assessment rather than a response to a specific development.

Potential Epstein-related document release

Another active but less time‑sensitive geopolitical market is trading on whether Epstein-related documents—potentially including previously sealed court filings or investigative material—will be released.

• Quoted probability in today’s data: not provided (market described as longer‑term and speculative)

The interest here stems from the possibility that such documents could:

• Name or further implicate high-profile political and business figures;
• Trigger renewed public and media scrutiny;
• Introduce idiosyncratic political risk in multiple jurisdictions.

With no explicit price quote in today’s snapshot and no fresh public reporting referenced, this remains a low‑visibility, high‑consequence tail risk in traders’ geopolitical books.

Source: Internal prediction market descriptions and pricing as of 4 Feb 2026 (Iran succession market at 56% for a change in leadership within its specified horizon; Epstein‑related document release market active, specific probability not included in this feed).

Crypto, Sports, and Other Speculative Markets: Bitcoin Moonshot Fades, Seattle Favored

Beyond macro and geopolitics, prediction markets are active across crypto and sports, offering a read on risk appetite and speculative sentiment.

Bitcoin’s upside capped in markets

Markets are notably skeptical of extreme upside scenarios for Bitcoin this year:

• Probability Bitcoin reaches its top target bracket (e.g., around $150,000) in 2026: 1%

Despite ongoing discussion of post‑halving supply dynamics, spot ETF flows, and regulatory shifts, traders are assigning only token odds to a blow‑off rally to the highest price tier. This suggests positioning that anticipates more measured or range‑bound trading, rather than a repeat of earlier cycle manias.

Pro football championship and MVP

Sports markets provide a different lens on crowd expectations heading into the 2026 Pro Football Championship:

• Seattle to win the 2026 Pro Football Championship: 68%
• New England to win the 2026 Pro Football Championship: 33%
• Current MVP favorite’s probability: 87%

These numbers point to Seattle as the clear favorite, with New England positioned as a meaningful but secondary contender. The 87% MVP pricing indicates markets see one standout candidate as overwhelmingly likely to secure the award, with limited room for late challengers barring an unexpected performance swing.

Source: Internal prediction market pricing data as of 4 Feb 2026 (Bitcoin top‑tier price bracket at 1%; Seattle championship contract at 68%, New England at 33%, leading MVP contract at 87%).