economics

kalshiMarch 24, 20263d ago

Will the President be impeached before Jan 20, 2029?

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Signal

NO TRADE

Probability

66%

Market: 68%Edge: -2pp

Confidence

MEDIUM

62%

Summary.

The market prices Trump impeachment before January 20, 2029 at 68%, while my analysis estimates 66% probability—a negligible 2 percentage point difference. The core logic is straightforward: prediction markets give Democrats an 84.5% chance of capturing the House in November 2026 midterms (supported by generic ballot leads of +6 to +11 points), and conditional on that outcome, approximately 80-85% probability Democrats follow through with impeachment. The December 2025 vote where 140 Democrats supported impeachment articles demonstrates near-unanimous party appetite; only the GOP majority blocked passage. The active Epstein Files scandal provides a ready impeachment vehicle, and Rep. Garcia has explicitly pledged aggressive investigations if Democrats win. However, eight months remain before the midterms—ample time for economic conditions (Iran conflict, gas prices near $4/gallon) to shift or Trump's historic-low approval (-21 net) to recover. The market recently self-corrected from 69% to 68% with elevated volume, suggesting informed participants recognize the slight overpricing. With minimal edge and substantial uncertainty around midterm outcomes and Democratic strategic calculations, the current market price appears reasonably efficient.

Reasoning.

This market is fundamentally about two sequential probabilities:

Democrats retaking the House in November 2026 midterms (~84.5% per prediction markets)
Democrats following through with impeachment if they gain control (~78-82% conditional probability)

STEP 1: ASSESSING DEMOCRATIC HOUSE TAKEOVER PROBABILITY The 84.5% market probability for Democratic House control appears reasonable given:

Generic ballot shows Democrats +11 (55% vs 44%) among certain voters (WaPo-ABC-Ipsos, Feb 2026)
Emerson poll confirms +6 Democratic edge (Jan 2026)
Current GOP majority is razor-thin (220-215), requiring only 3-seat net flip
Trump's approval at historic low (-21 net, 42% approval in March 2026)
Economic headwinds: gas prices near $4/gallon, 67% disapprove of cost of living approach
Iran military operations creating uncertainty

However, 8 months remain before midterms (Nov 2026). Historical precedent shows generic ballot leads can narrow. Economic conditions could improve if Iran conflict resolves or gas prices fall. I estimate Democratic House takeover probability at ~78-82% rather than 84.5%.

STEP 2: CONDITIONAL PROBABILITY OF IMPEACHMENT IF DEMOCRATS WIN HOUSE The December 2025 impeachment vote received 140 Democratic yes votes (near-unanimous support among Democrats present) despite GOP majority blocking it. This establishes baseline Democratic appetite.

Key factors supporting high conditional probability:

Rep. Robert Garcia explicitly pledged "long list of subpoenas" targeting Trump if Democrats win
Active Epstein Files scandal provides concrete impeachment vehicle
AG Bondi already facing impeachment articles (March 17, 2026), establishing investigative momentum
Trump's unique history: already impeached twice, making third impeachment less of a norm violation
Democrats would face pressure from progressive base to deliver on accountability promises

Factors reducing conditional probability:

Impeachment is politically costly and could hurt 2028 presidential prospects
Scandal fatigue: voters may punish Democrats for focusing on investigations vs. economy
Epstein Files controversy may fade by early 2027 when new House convenes
Moderate Democrats in swing districts may resist impeachment

I estimate conditional probability of impeachment given Democratic House control at ~80-85%.

STEP 3: COMBINED PROBABILITY CALCULATION P(Impeachment) = P(Dem House) × P(Impeachment | Dem House) Central estimate: 0.80 × 0.82 = 0.656 ≈ 66%

COMPARISON TO MARKET: Market is at 68%, my estimate is 66%. This represents only a 2 percentage point difference.

RECENT MARKET MOVEMENT ANALYSIS: Market moved DOWN from 69% to 68% in last 24 hours with 2.2x average volume. This suggests:

Possible informed trading or reassessment
Market may be converging toward more realistic probability
Could reflect skepticism about impeachment follow-through or Democratic chances

The market was arguably slightly overheated at 69% and the recent decline suggests some correction. My 66% estimate is now very close to current market price of 68%.

KEY UNCERTAINTIES:

Midterm outcomes are 8 months away (significant time for political landscape to shift)
Economic conditions highly volatile (Iran conflict, gas prices)
Epstein Files scandal may or may not maintain salience through 2026-2027
Unknown: what other scandals or events may emerge
Trump's ability to recover approval ratings (has done so before)

EDGE ASSESSMENT: Minimal edge. Market at 68%, my estimate at 66% = only 2pp difference. Given confidence level of 62%, this does not represent actionable edge. The recent market movement from 69% to 68% suggests market is self-correcting toward fair value.

Key Factors.

November 2026 midterm outcome is the critical determinant - Democrats need only 3-seat net gain to flip House from current 220-215 GOP control
Generic ballot strongly favors Democrats (+11 among certain voters, +6 in other polls) as of March 2026, but 8 months remain for conditions to change
Democratic appetite for impeachment already demonstrated: 140 Democrats voted for impeachment articles in December 2025 despite no chance of passage
Active Epstein Files scandal provides concrete impeachment vehicle, though salience may fade or evolve before 2027
Trump approval at historic low (-21 net, 42% approval) driven by cost of living concerns and Iran military operations
Impeachment only requires simple House majority passage, NOT Senate conviction - significantly easier threshold than removal from office
Economic headwinds (gas prices near $4, Iran conflict uncertainty) create difficult environment for incumbent party in midterms
Trump's unique circumstance: already impeached twice, reducing institutional barrier to third impeachment

Scenarios.

Base Case: Democrats Win House, Proceed with Impeachment

66%

Democrats capture House in November 2026 midterms with 3+ seat majority. New Democratic House convenes January 2027 and launches investigations into Epstein Files scandal and other Trump administration actions. By Q1-Q2 2027, House Oversight Committee (now Democratic-controlled) issues articles of impeachment which pass on party-line vote. Trump becomes first president impeached three times. Senate does not convict (GOP likely retains Senate), but market resolves YES because only House passage required.

Trigger: Democratic House victory in November 2026 (the critical trigger). Followed by: Rep. Garcia or other Democrat chairing Oversight Committee beginning investigations in January 2027. Subpoenas issued to DOJ, AG Bondi, and Trump administration officials. Articles of impeachment introduced and passed by late Q1 or Q2 2027.

No Impeachment Case 1: GOP Retains House

20%

Republicans retain House control in November 2026 midterms despite unfavorable generic ballot polling. This could occur through: (1) economic improvement (Iran conflict ends, gas prices fall, inflation moderates), (2) Trump approval rating recovery, (3) generic ballot narrowing as typical in election years, (4) GOP advantages in district-level geography and redistricting, or (5) polling error. With GOP House majority, no impeachment proceedings are initiated against Trump. Market resolves NO.

Trigger: Economic indicators improve significantly by summer 2026: gas prices fall below $3.50, Trump approval rises above 45%, generic ballot gap narrows to <5 points by September 2026. November 2026 election results show GOP retaining House majority of 218+ seats.

No Impeachment Case 2: Democrats Win House but Don't Impeach

14%

Democrats win House in November 2026 but choose not to impeach Trump despite progressive pressure. This could occur if: (1) moderate Democrats in swing districts resist impeachment as politically costly, (2) Epstein Files scandal loses salience by early 2027 or exculpatory evidence emerges, (3) Democratic leadership (Speaker, Oversight Chair) prioritizes legislative agenda over investigations to position for 2028 presidential race, (4) public polling shows impeachment is unpopular with swing voters, or (5) no clear 'smoking gun' evidence emerges from investigations. Market resolves NO.

Trigger: Democrats win House in November 2026 but: public polling shows <45% support for impeachment in early 2027, moderate Democratic caucus members publicly oppose impeachment, Speaker makes statements prioritizing economic legislation, investigations proceed but no articles introduced through 2027-2028, or Epstein Files investigation yields inconclusive results regarding Trump.

Risks.

Midterm elections are 8 months away - significant time for political landscape to shift dramatically
Economic conditions highly volatile: Iran conflict could end quickly, gas prices could fall, inflation could moderate - all improving GOP prospects
Generic ballot polling 8 months before election is predictive but not deterministic; historical examples of polling leads evaporating
Epstein Files scandal may lose salience, be superseded by other issues, or investigation may yield exculpatory evidence
Unknown unknowns: major geopolitical events, new scandals (for either party), Supreme Court decisions, or other developments could reshape political environment
Democratic strategic calculation may shift: impeachment could be seen as politically costly distraction from 2028 positioning
Moderate Democrats in swing districts may face constituent pressure to avoid impeachment and focus on economic issues
Trump has demonstrated ability to recover from low approval ratings in past; could rally base or benefit from external events
Polling error or district-level geographic advantages could allow GOP to retain House despite unfavorable national environment

Edge Assessment.

NO SIGNIFICANT EDGE. My estimated probability of 66% is only 2 percentage points below the current market price of 68%. Given my confidence level of 62%, this marginal difference does not constitute actionable edge.

The recent market movement is notable: price declined from 69% to 68% in the last 24 hours with 2.2x normal volume, suggesting informed traders may be reaching similar conclusions about slight overpricing at 69%. The market appears to be self-correcting toward fair value.

The core drivers are well-understood by the market: ~80-85% Democratic House takeover probability combined with ~80-85% conditional impeachment probability yields ~66-68% overall probability. Market participants are clearly factoring in the same research I'm analyzing (generic ballot polls, approval ratings, stated Democratic intentions, Epstein Files scandal).

RECOMMENDATION: No bet at current 68% price. The market is reasonably efficient on this question. Would only consider betting NO if price rises above 72-73%, or betting YES if price falls below 62-63%.

What Would Change Our Mind.

Democratic generic ballot lead narrowing to less than 5 points by September 2026, indicating GOP recovery momentum before midterms
Trump approval rating rising above 47% or net approval reaching positive territory, suggesting economic/political landscape shift
Gas prices falling below $3.25/gallon or Iran conflict resolution, removing key economic headwinds for GOP in midterms
Epstein Files investigation yielding exculpatory evidence for Trump or scandal losing media attention by summer 2026
Prominent moderate Democrats in swing districts publicly opposing impeachment plans in Democratic leadership statements after potential November 2026 victory
Market price moving above 72% (creating NO bet opportunity) or below 63% (creating YES bet opportunity)
November 2026 midterm results showing GOP retaining House with 218+ seats or Democrats winning with 230+ seat supermajority
Major geopolitical or domestic crisis creating 'rally around the flag' effect that boosts presidential approval by 10+ points
Democratic House leadership post-midterm explicitly stating impeachment is not on the agenda for 117th Congress

Sources.

Market History.

Market moved down 1.0 percentage points in the last 24 hours (from 69¢ to 68¢). 7-day range: 66¢ – 69¢. Volume is 2.2x the 7-day average, suggesting significant new interest or informed trading.

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