What Are the Chances? We Handicap the Key Issues
April 4, 2022
UKRAINE: A turning point has arrived (70% chance) but the war isn’t over yet as
Russia re-groups in the east. After reading several pieces this weekend on the
inept Russian military, the outcome of this war seems more likely than ever. Chances that Russia wins: only 30%.
VOLODYMYR ZELENSKY: Chances he can broker a deal later in April: 60%. Chances that Kyiv will remain standing: 80%. Chances that some of eastern Ukraine will fall: 60%. Chances that the Ukrainian people will push back if they don’t like the peace treaty: 70%.
TURBULENCE IN MOSCOW: Chances of even more sanctions, prompted by war crimes: 70%. Chances of an ugly Russian purge this spring: 60%. Chances of an economic Depression in Russia: 70%. Chances that Putin will be ousted: 60%. Chances that his replacement will be even more strident: 70%.
THE CHINESE REACTION: Chances that Beijing will move on Taiwan any time soon: suddenly only 30%, The last thing Chinese President Xi needs are crippling sanctions and a bloody war. Chances China will be more outspoken in opposing the Russian invasion: 55%.
CHANCES OF AN IRANIAN NUCLEAR DEAL: 40% and falling. Can’t rule it out, but it doesn’t seem imminent.
CHANCES THAT JOE BIDEN’S JOB APPROVAL RATING will soar after a Ukrainian deal: 40%. Inflation is a bigger issue in the U.S.
CHANCES THAT REPUBLICANS WILL TAKE THE HOUSE: 70%. There’s an outside chance for the Democrats but still another immigration crisis and revelations about Hunter Biden’s deals simply reinforces that this is a Republican year.
CHANCES THAT REPUBLICANS WILL TAKE THE SENATE as well: 52%, and it will stay at roughly 50-50 until November.
CHANCES THAT JOE BIDEN RUNS AGAIN: 40%, we wrote about this last week. Chances that Donald Trump runs: 60%, not the 80% chance that many pundits expect. Chances of a Trump indictment this spring over the Jan. 6 riot: 60%.
CHANCES OF FED RATE HIKES: When the consensus is overwhelmingly in agreement, we worry — but chances of several more rate hikes: 100%. Chances of a 50 basis point rate hike on May 4: 60% and rising.
CHANCES THAT INFLATION WILL SUBSIDE: only 30%, price pressures may moderate a bit but they won’t subside — not with the roaring economy enjoying full employment. Chances the jobless rate falls below 3.5%: perhaps 70%. Chances of a serious global food shortage: 80%.
CHANCES FOR MORE TAX AND SPENDING BILLS: They’re still alive. Chances of tax hikes on the uber-wealthy: 40%. Chances of tax hikes on highly profitable companies: 55%. Chances of more spending on new social programs: 45%.
CHANCES OF A SIGNIFICANT INCREASE IN DEFENSE SPENDING: Close to 100%, this is a very easy call. A huge hike is coming for ship-building.
CHANCES OF MEANINGFUL DEFICIT REDUCTION: No better than 20%, despite $30 trillion in U.S. debt. But there’s a 70% chance that the pace of spending hikes will begin to slow.
CHANCES THAT CONGRESS WILL LEGALIZE MARIJUANA: only 30% despite strong support in the House. A Senate filibuster against the bill looms.
CHANCES OF STILL ANOTHER DELAY ON RESUMING STUDENT LOAN PAYMENTS: Perhaps 60%, Biden can’t afford to lose young voters.
CHANCES OF A REGULATORY CRACKDOWN: Maybe 70%, with financial services firms — including privately held companies — under the gun at the SEC. The threat of a big tech break-up may be exaggerated, but there’s an 80% chance that antitrust enforcement will become even more aggressive.
A HUGE DOMESTIC ISSUE: The great Western drought will get even worse (80% chance), while chances of climate change legislation are close to zero.
CHANCES OF JUDGE KETANJI BROWN JACKSON’S CONFIRMATION: At least 80%. Chances that Justice Clarence Thomas will recuse himself from Jan. 6 cases: close to zero.
CHANCES WE’VE TRULY TURNED THE CORNER ON COVID: Probably 80%, but it’s not 100% because new waves — and new variants — lurk.
FINALLY, DESPITE THIS INCREDIBLE WALL OF WORRY, CHANCES OF A RECESSION this year are only 30%; there’s simply too much stimulus in the system.
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