Prediction Markets Bet on Prolonged Iran War

Prediction markets, including Polymarket, and professional forecasters from Good Judgment, are signaling a much longer duration for the US-Iran conflict than initially projected by the White House, with low probabilities assigned to near-term ceasefires. This pessimism coincides with Federal Reserve Chair Jerome Powell acknowledging that rising oil prices, exacerbated by the conflict, pose a significant inflation risk, leading the Fed to raise its 2026 inflation forecast. Markets reacted negatively, with Bitcoin dropping, Nasdaq falling, and Treasury yields rising, as sustained high oil prices ($108.78/barrel) create headwinds for risk assets by suggesting stickier inflation and fewer expected rate cuts. The market consensus suggests investors should prepare for a prolonged conflict unless Tehran signals a change in its stance.

(Source：BeInCrypto)