All
Outcomes
Market
Price
AI Fair
Value
Value
Edge
5.0%
YesNo
7.0%
YesNo
10.0%
YesNo
6.0%
YesNo
5.5%
YesNo
AI Insights:
03.15 18:31 UpdatedFair Value Reasoning:
Current US unemployment is 4.4% (Mar 2026). While recession risks are rising due to the 'Iran conflict' and oil price shocks (Goldman Sachs sees 25% recession odds, BCA 40%), the baseline consensus from major institutions (CBO, Fed, JP Morgan) projects a 2026 peak of 4.5%-4.6%, staying below the 5.0% threshold. The market's pricing (5.0% Yes @ 57c) implies a probability >50%, which is significantly more bearish than expert consensus. Fair value is adjusted downward to reflect the base case of a soft landing or mild recession where unemployment does not breach 5%.
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Arbitrage|Low Risk
Arbitrage Plan:
Buy 'No 10.0%' (Low Risk Yield)
Plan Description:
The 'Yes' price for 10.0% is 6.85c, implying a cost of 93.15c for 'No'. For unemployment to spike from 4.4% to 10.0% within the remaining 9 months of 2026, a catastrophic collapse similar to the COVID lockdowns would be required (even the 2008 crisis took 2 years to hit 10%). This extreme tail risk is negligible. Buying 'No' yields ~6.85c profit with an annualized return of ~9.3%, representing a very low-risk strategy.Sign up to view more information
Arbitrage: 6¢
|Annualized yield: 9.25%
Hedging
US 10Y Yield
DXY
S&P 500
This event is directly related to whether the US economy enters a recession and the Federal Reserve's rate cut path. If the unemployment rate unexpectedly spikes to 7% or 10% in 2026 (triggering the high-value options), it would signal a severe recession, causing US Treasury yields to plummet (safe-haven and rate cut expectations), equities to likely sell off due to earnings deterioration fears, and the DXY to fluctuate based on rate differentials. It is a classic macro hedging instrument.
Divergence
Significant divergence exists. Mainstream consensus (Goldman, Fed, CBO) projects a 2026 unemployment peak around 4.6% (favoring '5.0% No'), whereas the prediction market is pricing '5.0% Yes' as the favorite at 57c. The market is pricing in significantly higher panic and stagflation tail risks than expert economic models suggest.
