The odds of a ceasefire between the U.S. and Iran have plummeted on prediction market Polymarket as military exchanges between the two nations escalate. Over $1.5 million has been wagered on the outcome, reflecting heightened market uncertainty regarding the geopolitical situation. The decline follows Iran downing an American Apache helicopter and subsequent U.S. strikes ordered by President Trump.

Polymarket, a Polygon-based platform utilizing the USDC stablecoin, currently hosts a contract titled "Trump announces US x Iran ceasefire over by…?". The platform allows users to bet on the likelihood of specific political outcomes. The data indicates a sharp reversal in sentiment from earlier expectations that a deal was imminent.

Bettors now assign a 7% probability to a deal being announced by June 12, representing a 43% decrease in the odds. The outlook for mid-June remains similarly bleak, with a 15% probability placed on a ceasefire by June 15, down by 35%. While the probability for a deal by June 30 is higher at 31%, this figure has still recorded a decline of 22%.

President Trump announced on Wednesday that additional military action remains a possibility if Tehran fails to reach an agreement. This warning coincided with Iran's top military command announcing the closure of the Strait of Hormuz to oil tankers and commercial vessels. The military command warned that any ship attempting to pass through the strategic waterway could come under fire.

Senator Bernie Sanders criticized President Donald Trump's remark that he "loves the inflation" after the U.S. consumer price index rose to 4.2% in May, arguing that working families are struggling to afford gas and groceries. The inflation rate accelerated from 3.8% in April, reaching its highest level since April 2023 and moving further away from the Federal Reserve's target. Sanders used the comment to revisit Trump's campaign pledge to end inflation, stating on X that working families do not love inflation because of the president's actions.

Causes of Inflation Disputed

Trump attributed the inflation spike to the conflict in Iran, arguing that pressure on global oil supplies has lifted energy costs. He predicted that oil prices would fall sharply once the conflict ends. Economist Peter Schiff countered that war is inflationary primarily because governments finance conflicts through larger deficits rather than taxes, which central banks then monetize, diverting resources from consumer goods production.

Political and Economic Reactions

Former Transportation Secretary Pete Buttigieg accused the administration of focusing on irrelevant issues while inflation worsens. The debate over the causes of inflation carries implications for investors, as persistent inflation above the Fed's 2% target could bolster expectations for further rate hikes. Economists expect the central bank to hold rates on June 17.