VICO Future Monitor

Access VICO forecasts or make your own at www.vico.io as well as on the Bloomberg Terminal at WSL PREDICT<GO>, WSL ELECTION<GO> and WSL VICO<GO>.

What we are following this week:

• Economics: Oil Prices, Inflation, 2026 Rate Changes

• Showcase: VICO Quant

• Global Politics: Iran, Israel x Hezbollah

• Domestic Politics: DHS, California Governor Primary, Sports Betting Prediction Market Ban

Economics: Oil Prices, Inflation, 2026 Rate Changes

Brent crude climbed back to over $100 this week as optimism about a coming end to the war with Iran fell. Fears of prolonged oil prices have fueled worries about spiraling inflation throughout 2026. In turn, these inflation concerns have made investors far more bearish on possible rate cuts this year, with some fearing hikes before 2026 is over. This week:

Oil Prices: The First Domino

• 69%: The odds for Brent crude to reach at least $115 in the next 90 days.

• 36%: The odds for Brent crude to fall below $90 in the next 90 days.

  • The VICO model cites the low likelihood of a near-term solution to open the Strait of Hormuz as a reason to believe oil will likely climb higher.

Inflation: Oil driving prices higher

• Last week: 25% → Today: 53.5%: The odds for the US inflation rate to exceed 4% in 2026. (Kalshi: 49.3%)

  • Bloomberg ticker: VICOYYHU

  • Note: The VICO model points to inflation tracking in tandem with oil prices. As the model becomes more pessimistic about the stabilization of oil prices over a longer run, inflation expectations in our models rise proportionately.

• 17%: The odds for the US inflation rate to exceed 5% in 2026.

  • What if the US-Iran war does not end within the next six weeks? 17% → 51%

2026 Rate Changes: Cuts grow more distant

• 64% → 34%: The odds for at least one rate cut by the end of 2026.

• The VICO model took a harsh downward turn along with pundits and prediction markets after the Fed meeting this week, in which Chairman Powell stressed inflation concerns moving forward.

• 33% → 56%: The odds for at least one rate hike by the end of 2026. (Polymarket: 23%)

  • Note: While Kevin Warsh was picked for the next Fed chair with the mission to lower rates, the structural impact of the Iran war may keep him from being able to do so. Upward inflation pressure may make rate cuts too risky in the near-to-medium term.

• 25% → 36%: The odds for interest rates to end the year above the current 3.5-3.75% range.

  • CME Group estimates this forecast at 34.5%.

Showcase: VICO Quant

VICO is developing a new tool: VICO Quant. VICO Quant allows users to aggregate forecasts into themes and formulate indices. Users can then compare forecast indices to market behavior and identify statistically-significant relationships between individual tradable assets and forecast series.

• In the following example, we aggregated various forecasts on the situation in the Gulf into an Iran Escalation Index.

• Behind the scenes, we are already running analyses estimating relationships between our indices and individual assets. We are seeing statistically significant outcomes for beta coefficients, R-squared > .55, and Spearman correlation coefficients > .70 in linear regression models for long-running pair-wise series.

Global Politics: Iran, Israel x Lebanon

Iran is denying reports of direct negotiations with the United States, despite President Trump claiming such talks are ongoing and progressing well. The mixed signals are complicated further by the deployment of over 1,000 troops from the 82nd Airborne Division to the region. At the same time, Israel has stated its intention to control parts of Southern Lebanon to act as a buffer zone between the two nations. This week:

Iran: Resolution Still Distant

• Further military action

  • 52%: The odds for US troops to land on Kharg Island in the next 90 days.

  • 44%: The odds for US troops to land in Iran to capture nuclear materials in the next 60 days.

    • While the VICO model notes large logistical concerns, the model also argues that the amassing of troops in the region should be taken seriously, not merely as a negotiating tactic. The model argues that dealing with Iran’s possible nuclear capabilities is a primary objective of the Trump administration.

Israel x Hezbollah:

• 68.5%: The odds for Israel to take and occupy territory in Southern Lebanon by the end of 2026.

• 48%: The odds for Israel to annex captured territory in Southern Lebanon in the next two years.

  • While the UN has expressed concern over the Israeli plan, and Hezbollah has vowed resistance, the VICO model argues that recent statements and military action have shown Israel has both the capability and willingness to take territory and to potentially annex it in the long term.

Domestic Politics: DHS, California Governor Primary, Sports Betting Prediction Market Ban

Senate Republicans have reportedly reached a deal to reopen DHS, though the plan has faced much opposition from Senate Ds and the White House. Meanwhile, a crowded field for the California Governor’s race has raised the possibility of two Republicans advancing to a runoff while Democrats split their votes. And on Capitol Hill, a bipartisan bill has been proposed to ban sports betting on prediction market sites. This week:

DHS: Tall Hurdles Remain

• 17%: The odds for the US to reopen DHS by March 31, 2026. (Polymarket: 30.7%)

  • The VICO model is pessimistic about the deal proposed by Senate Republicans, citing bipartisan pushback from both Democrats and President Trump.

California Governor Primary: GOP has a Chance

• 20%: The odds for Eric Swalwell to reach the California Governor’s race runoff election.

• 40%: The odds for two Republicans to reach the California Governor’s race runoff election.

  • The VICO model points out that while polling frequently shows two Republicans leading the race, Democrats still have more than two months to coalesce around a front-runner.

Sports Betting Prediction Market Ban: Still Unlikely

• 32%: The odds for the US to ban sports betting on prediction markets in 2026.

  • The VICO model argues that passing such a ban will be difficult to prioritize in a divided Congress during an election year, despite its bipartisan nature.

About Us

• The VICO platform provides a new category of decision-superiority: an AI-powered forecasting, simulation, and scenario-assessment engine that converts qualitative signals—news and expert judgments about real-world events—into standardized, quantitative probabilities and insights.

• VICO empowers decision-makers with measurable insight into what is likely to happen and what could happen, replacing slow, subjective human analysis or capricious prediction markets with continuously updated, model-driven forecasts.

• Our models are rigorously backtested, achieving Brier Scores below 0.15. (Note: Specific Brier Scores and backtesting information can be provided upon request to our customers.)

• 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 copyright of Vico Technologies Inc.