Strike Two!

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What we are following this week:

• Global Politics: US Strikes Iran, Russia x Ukraine, China x US Summit

• Economics: Oil, UK Tariffs, April Jobs Report, NYC Taxes, US Debt

• Domestic Politics: Senate/Governors’ Elections

Global Politics: US Strikes Iran, Russia x Ukraine, US x China Summit

The US resumed strikes on Iran Thursday. The strikes end the temporary ceasefire that produced no new breakthroughs in negotiations. Meanwhile, Russia warned foreign diplomats to flee Kyiv on Wednesday, as Moscow promised to launch a retaliatory strike if Russia’s Victory Day parade is targeted by Ukrainian attacks (a possibility Zelensky has hinted at). And President Trump is headed to China next week to meet with Xi Jinping at a summit, which some hope will smooth over trade relations. This week:

US Strikes Iran

• In our April 23rd newsletter, the VICO model put a resumption of strikes before May 31st at 93.5%.

  • In the face of ongoing negotiations and a ceasefire, the VICO model still accurately predicted future strikes with a great degree of confidence.

  • (Neither Polymarket nor Kalshi had markets tracking the odds of resuming strikes.)

• Since May 4th, the VICO model has been tracking the odds for a US strike within the next seven days, which opened at 42% and reached a high of 63.5% on Thursday morning, hours before the strikes were launched.

Other Iran Forecasts

• 82%: The odds for Iran to strike another country in the Middle East in the next 30 days.

• 12%: The odds for the Strait of Hormuz to partially reopen in the next 30 days.

  • The VICO model remains highly skeptical of negotiations and therefore argues that concessions from either side remain unlikely.

Iran Escalation Index

Russia x Ukraine

• 15%: The odds for Ukraine to successfully strike Russia’s Victory Day parade

  • Russia has scaled back its normal parade and increased security in preparation for possible attacks. The VICO model argues that this makes Ukraine less likely to attempt an attack and less likely to be successful if they do.

• 20%: The odds for Putin to be out as the President of Russia in 2026.

  • The VICO model explains that combined risks from old age, stress brought on by the war, and low approval ratings justify a 20% risk of Putin being out in some capacity in 2026.

• Simulation: What if Ukraine successfully attacks Russia’s Victory Day parade?

  • 90%: Within 24-48 hours, Russia launches an unprecedented wave of ballistic and cruise missiles targeting Kyiv, Kharkiv, and Odesa. The attacks result in large numbers of civilian casualties and damage to energy infrastructure.

  • 85%: The attack is portrayed by State media as a terrorist attack from the West, which galvanizes support for the war, resulting in an increase of approval for the war by 10-15%.

  • 60%: Key Western allies like Germany, France, and Italy express concern over the perceived escalation. Public and parliamentary debates delay the future delivery of long-range weapons to Ukraine.

  • 45%: Russia launches a severe wave of coordinated cyber attacks targeting Ukraine’s power grid and telecommunications networks.

  • 30%: The attacks lead to intense internal scrutiny and force a series of high-level dismissals and reassignments within the Ministry of Defense, the General Staff, and the FSB.

US x China Summit

• 94%: The odds for the summit to occur on time. (May 15)

  • The summit was delayed once due to the Iran war, but the VICO model is confident the summit will make the May 15th date.

• 24%: The odds for China to implement its prepared round of secondary rare earth mineral export controls in 2026.

• 12%: The odds for China to lift or reduce tariffs on the US in the next 60 days.

• 5%: The odds for the US to lift or reduce tariffs on China in the next 60 days.

  • The VICO model notes that the Trump administration rarely reduces tariffs unless a major deal is struck, something which the VICO model views as highly unlikely.

• 4%: The odds for the US and China to reach a comprehensive trade agreement in the next 90 days.

Economics: Oil, UK Tariffs, April Jobs Report, NYC Taxes, US Debt

Oil prices remain high despite a drop following the US announcement that the Iran ceasefire remains active. Following King Charles III’s visit to the US, President Trump lifted sanctions on British whiskey, possibly opening the door to further tariff relief. The April jobs report is set to be released on Friday, a test of the ongoing stress of the Iranian war on the economy. At the same time, Mayor Mamdani announced his plan to tax vacant homes in NYC, part of his proposal to address NYC’s burgeoning debt crisis. And finally, the US exceeded 100% of publicly held debt-to-GDP this week, as the debt continues to balloon. This week:

Oil

• 72%: The odds for Brent crude oil to exceed $130 in the next 30 days.

• 32%: The odds for Brent crude to fall below $100 in the next 30 days.

UK Tariffs

• 6%: The odds for the United States to reduce or lift more tariffs on the United Kingdom in the next 60 days.

  • The VICO model argues that the lifting of the whiskey tariff was merely symbolic and unlikely to override the tariff-heavy preferences of the Trump administration.

April Jobs Report

• 42%: The odds for the US to add at least 100,000 jobs in the April jobs report. (Kalshi: 32%)

• 92%: The odds for the US inflation rate to exceed 3.8% in the April jobs report. (Polymarket: 38%)

  • Recent increases in oil prices have pushed up the VICO model’s estimate for April inflation.

NYC Taxes

• 78%: The odds for more billionaires to leave New York City than to enter in 2026

• 62%: The odds for New York City to achieve a balanced budget in the next two years

  • The VICO model believes a deal can be reached between the city and the state to provide fiscal assistance to NYC.

US Debt

• 42%: The odds for US dollars to make up less than 50% of allocated foreign exchange reserves in the next 10 years.

• 62%: The odds for the US debt-to-GDP ratio to exceed 140% in the next 5 years

  • The VICO model argues that any measures to significantly cut back on the deficit would require benefit cuts or tax increases, both of which are extremely politically unpopular.

Domestic Politics: Senate/Governors’ Elections

Primary season in states across the country continued this week with Janet Mills dropping out in Maine, Vivek Ramaswamy winning his Ohio Gubernatorial primary, and a debate in the California Gubernatorial primary. We’re taking a look at primaries across the country to see where each race stands. And a new Harvard/Harris poll showed Kamala Harris with a commanding polling lead over other prospective Democrats, though questions remain about whether or not she will run. This week:

Senate/Governor Elections

Maine:

• 40%: The odds for Graham Platner to win the Maine Senate Election. (Polymarket: 50%)

Texas:

• 53%: The odds for Paxton to win the Texas Senate runoff. (Kalshi: 61%)

• 22%: The odds for Paxton to win the Texas Senate general election. (Kalshi: 36%)

• 35%: The odds for John Cornyn to win the Texas Senate general election. (Kalshi: 20%)

  • What if Cornyn is the nominee? 35% → 70%

  • While the VICO model views Paxton as the very slim favorite to win the primary, it still gives Cornyn better odds to win the general election, suggesting he is the stronger candidate to face Talarico.

Ohio:

• 44.2%: The odds for Vivek Ramaswamy to win the Ohio Gubernatorial election. (Polymarket: 46%)

California:

• 39.5%: The odds for Tom Steyer to win the California Gubernatorial election. (Polymarket: 37%)

• 31%: The odds for Xavier Becerra to win the California Gubernatorial election. (Polymarket: 47%)

• 19%: The odds for Steve Hilton to win the California Gubernatorial election. (Polymarket: 6%)

  • The California governor’s race has consolidated to two clear front-runners in Steyer and Becerra, but the VICO model remains higher on Hilton’s odds than prediction markets, and less bullish on Becerra.

About Us

• VICO empowers decision makers to quantify and navigate event risk. Forecast, simulate and monitor political, geopolitical and economic events.

• Our proprietary AI models are rigorously backtested and do not rely on any betting market information.

• Learn more and obtain a beta account at www.vico.io or email us at inquire@vico.io

Methodology and Copyright Notes:

All percentage changes are over the last week except where noted.

All data and content are owned by and copyrighted by VICO Technologies Inc.