Will the US strike Iran by February 28, 2026?

Step 1: Base Rate Analysis - Historical precedent for US strikes on Iranian territory is extremely low. However, Trump authorized strikes on Iranian nuclear facilities in 2025, establishing recent precedent. This is critical as the threshold has already been crossed once under this administration. Base rate in normal circumstances: ~2-5%. Under current conditions with recent precedent: ~8-12%. Step 2: Current Escalation Indicators - Multiple concerning signals suggest elevated risk: Two carrier strike groups deployed, US military actively preparing contingency plans for weeks-long sustained campaign, Iran rebuilding nuclear sites and expanding activities toward weapons-grade capability, Trump-Netanyahu coordination on increased pressure, previous authorization of strikes in 2025 shows willingness, and 44-day window sufficient for rapid escalation. Step 3: De-escalation Factors - Active diplomatic negotiations scheduled in Geneva, both sides publicly stating preference for diplomacy, significant regional escalation risks and potential Iranian retaliation, major economic disruption concerns, some US allies urging continued diplomatic channels, and no immediate triggering event mentioned. Step 4: Trump Unpredictability - Adds 3-5 percentage points uncertainty in either direction; authorized strikes before, repeatedly threatened military action, shown willingness for unexpected military action, but also engaged in diplomatic outreach. Step 5: Timeline Consideration - 44 days is relatively short for escalation from current diplomatic posture to military strikes, but not impossible. Rapid escalation scenarios include negotiations collapse, Iranian nuclear breakthrough, attack on US forces/allies, or Trump deciding preemptive action needed. Step 6: Market Calibration - Market at 13% suggests 'unlikely but non-trivial risk.' Estimate 18% (+5pp vs market) because market may underweight: the significance of 2025 strikes as precedent-setting, compressed timeline creating urgency around Iranian nuclear progress, Trump's higher propensity for military action compared to typical presidents, and level of current military preparation. However, difference is modest because diplomatic channels remain active and deterrents are substantial.

Modest edge detected: 18% estimate vs market 13% = +5 percentage point edge. Market appears to underpricing several factors: (1) Precedent discount - 2025 strikes show Trump has already crossed threshold of attacking Iranian territory; market may be treating as 'normal' baseline rather than elevated-risk; (2) Compressed timeline urgency - 44 days is short enough that diplomatic resolution challenging if Iran continues nuclear expansion; (3) Military preparation intensity - Two carrier groups plus weeks-long campaign planning suggests serious intent beyond mere deterrence; (4) Netanyahu pressure multiplier - Coordinated US-Israel pressure increases action probability. However, edge is modest because diplomatic channels remain genuinely active, deterrents are substantial and real, market is often well-calibrated on geopolitical events, and information asymmetry is limited. Small positive edge exists for taking Yes position at 13%, but position sizing should be conservative given 55% confidence level, rapid information environment, reputational cost risks, and modest edge magnitude (~38% relative edge but only 5 percentage points absolute). If taking position, risk 1-2% of bankroll maximum.