The Probability Outlook
Universal Asset Owners · The Probability Desk
The Desk's probability research for long-horizon capital — our estimates against market prices, and the decade-scale questions no market prices.
Updated 2026-06-11 · 6,807 short-horizon market contracts and 11 Federal Reserve data series · refreshed every morning before the Daily Brief.
One system, three daily views.
Command Center — what is moving right now ·
Scenario Register — the ten standing risks and their drivers ·
The Probability Outlook (this page) — our estimates against market prices, plus The Long Horizon.
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Today in one minute
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Inflation is doing the damage. Stocks and bonds are moving together (correlation +0.70), so the classic 60/40 hedge is not protecting portfolios right now.
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The widest disagreement today: a major shipping-chokepoint disruption. The Desk says 59%; the nearest traded contracts say 6%.
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6 of the Desk's ten standing risks are not priced by any market. If you hold them — and a universal owner does — you are the market.
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From The Long Horizon: combined sovereign-wealth-fund and public-pension AUM exceeds USD 75 trillion by 2035 — the Desk's estimate is 55% (by 2035).
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Where the Desk differs from market prices
Red gap: the Desk sees more risk than the market is pricing. Green: less. Not priced means no liquid market contract exists anywhere — the market has no view. Open The evidence on any row for the real-economy signals (energy, metals, storms, trade, fiscal cash flows) and the traded contracts behind it.
The Desk = the Probability Desk’s governed estimate (sourced base rates, live signals, public calibration record — methodology). The market = median of the nearest tradable contracts on Polymarket and Kalshi; contracts are short-horizon proxies and are quoted verbatim so you can judge the fit yourself.
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What markets already price
Measured from market prices, not opinion — the baseline the Desk’s view is judged against.
16% US recession within 12 months What the Treasury yield curve implies (NY Fed method). | Calm Equity insurance cost Near-term crash protection is cheaper than long-term — options markets are calm. | 14% Credit stress percentile (10 years) High-yield spreads at 2.78% — corporate credit is priced for calm. | 2.34% 10-year inflation expectations Long-run expectations sit +0.24pp from the 2% anchor. |
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The Long Horizon
Markets price the next 18 months. A sovereign portfolio holds for 30 years. These are the Desk’s odds on the questions that horizon actually owns — anchored to the historical record, reviewed quarterly, never silently rewritten.
| 42% | The US dollar's share of allocated global FX reserves falls below 50% by 2040 by 2040 · on the daily register at 31% The evidenceHistory says: USD reserve share has declined from ~71% (2000) to ~58% (2025), roughly -0.5pp/yr; a fall below 50% by 2040 requires the trend to persist without acceleration (IMF COFER (Currency Composition of Official Foreign Exchange Reserves), quarterly) Why it matters now: Reserve diversification into gold and non-traditional currencies accelerated after 2022 sanctions; central-bank gold buying is at multi-decade highs. Latest research review (2026-06-10): Deep-research review 2026-06-10: COFER USD share 56.77% (2025Q4, IMF Mar-2026); decline ran ~0.87pp/yr 2017-2025 — reaching <50% by 2040 needs only ~0.5pp/yr, SLOWER than the realized pace. Central banks bought 1,045t (2024) and 863t (2025) of gold (WGC). Counterweights: USD still on one side of 89.2% of FX trades (BIS Triennial, Sep-2025), euro flat ~20%, RMB 1.95%. NB: IMF now imputes the unallocated portion — 'allocated' as a category ended 2025Q3; resolution reads on total COFER. What would change our mind: Any COFER quarter prints USD <55%; RMB COFER share >3.5% or 'other currencies' >8%; Central-bank gold buying >900t/yr through 2027. |
| 30% | Stock-bond correlation averages POSITIVE across the 2030s — the diversification regime of 2000-2020 does not return decade of the 2030s · on the daily register at 36% The evidenceHistory says: US stock-bond correlation was positive for most of the 1970s-1990s (inflation-dominant regimes) and negative 2000-2020 (demand-shock regimes); regimes have historically persisted for decades once established (Long-run return datasets (Shiller; AQR 'A Century of Stock-Bond Correlations')) Why it matters now: Every 60/40 portfolio and LDI hedge built since 2000 embeds the negative-correlation assumption; supply-driven inflation breaks it. |
| 50% | G7 public retirement systems in aggregate become persistent net SELLERS of financial assets by 2035 by 2035 · on the daily register at 36% The evidenceHistory says: Japan's GPIF and several European pay-as-you-go reserves already flipped to structural drawdown in the 2010s-20s as old-age dependency ratios passed ~35%; the US, UK, Canada cohort crosses comparable thresholds 2030-2040 (OECD Pensions at a Glance; UN World Population Prospects dependency ratios) Why it matters now: The marginal buyer of duration and equities for 40 years becomes a seller; no prediction market prices it because no contract spans it. Latest research review (2026-06-10): Deep-research review 2026-06-10: US OASI depletion moved EARLIER to Q4-2032 (2026 Trustees Report, Jun-9-2026) — ~$2.5T of mechanical Treasury redemptions now under way; Japan GPIF in framework drawdown since ~FY2009; Germany's reserve ~1 month of outlays. Counterweights: Canada CPP a net buyer to 2030/2057, France AGIRC-ARRCO in surplus (+EUR1.4bn 2025), and post-depletion the US has nothing left to sell — 'persistent at 2035' hinges on US legislation. Near coin-flip. What would change our mind: 2027 Trustees Report moves OASI depletion into 2031 or earlier; GPIF AUM falls two consecutive fiscal years net of returns; AGIRC-ARRCO technical result turns negative. |
| 40% | At least 5% of US housing stock is effectively uninsurable in the private market by 2035 by 2035 · on the daily register at 39% The evidenceHistory says: California FAIR Plan and Florida Citizens policies-of-last-resort have roughly tripled since 2018; state-backed residual pools already cover several percent of the two largest cat-exposed states (State residual-market enrolment data (CA FAIR Plan, FL Citizens); Swiss Re sigma cat-loss series) Why it matters now: Insurance is the repricing mechanism for climate risk; when cover withdraws, collateral values follow — directly into pension and SWF real-asset books. |
| 25% | A cross-strait military conflict (blockade or invasion) occurs by 2035 by 2035 · on the daily register at 59% The evidenceHistory says: Great-power territorial flashpoints with standing military build-ups have escalated to armed conflict in roughly 1 in 4 comparable 10-year windows since 1945 (Korea, Suez, Falklands, Ukraine); deterrence held in the rest (Correlates of War project; desk reference-class assembly (ADR-0103 discipline)) Why it matters now: The crowd prices 2026-contract odds at ~7%; the decade-cumulative number — the one a 30-year portfolio actually carries — is several times that. |
| 35% | A G7 central bank is forced into explicit yield-curve control or debt-monetization for FISCAL reasons by 2035 by 2035 · on the daily register at 34% The evidenceHistory says: Japan ran explicit YCC 2016-2024 at ~260% gross debt/GDP; the US, UK, France and Italy are converging on the debt-service share of revenue at which fiscal pressure historically dominates monetary policy (financial-repression episodes 1945-1980) (BIS debt statistics; Reinhart & Sbrancia, 'The Liquidation of Government Debt') Why it matters now: Fiscal dominance is the single largest unhedgeable exposure in a sovereign-bond-heavy portfolio. |
| 30% | US trend productivity growth sustains above 2.5%/yr for 5+ consecutive years before 2035 (the AI dividend materializes at macro scale) before 2035 · on the daily register at 15% The evidenceHistory says: In the postwar US record only one five-year span cleared 2.5% sustained — the 1995-2004 IT diffusion wave; general-purpose technologies have taken 10-20 years from invention to measured productivity (BLS multifactor productivity series; Brynjolfsson 'productivity J-curve' literature) Why it matters now: Whether the AI capex boom earns its cost of capital is the central asset-allocation question of the decade; the macro data, not the narrative, will answer it. |
| 35% | The euro area averages nominal GDP growth below 2%/yr across the 2030s ('Japanification' completes) decade of the 2030s · on the daily register at 32% The evidenceHistory says: Japan averaged ~0.4% nominal growth 1995-2015 after its working-age population peaked; the euro area's working-age population peaked ~2010 and its old-age dependency ratio tracks Japan's with a ~15-year lag (UN World Population Prospects; IMF WEO long-run series) Why it matters now: A repeat compresses long-run real rates and re-rates every euro-denominated liability stream — the quiet scenario nobody trades. |
| 55% | Combined sovereign-wealth-fund and public-pension AUM exceeds USD 75 trillion by 2035 by 2035 · on the daily register at 36% The evidenceHistory says: The pool grew from ~USD 30T (2010) to ~USD 58-62T (2025), ~5%/yr through two drawdowns; USD 75T by 2035 needs only ~2.5%/yr — but pension-system drawdown (see LO-PENSION-NETSELLER) cuts both ways (Global SWF annual rankings; Thinking Ahead Institute Global Pension Assets Study; UAO Registry data) Why it matters now: The growth of the universal-owner pool itself — who owns the future market — is the meta-question of this publication. |
| 15% | A binding carbon price of at least USD 100/tCO2 covers more than 50% of global emissions by 2040 by 2040 · on the daily register at 43% The evidenceHistory says: Carbon pricing covered ~24% of global emissions in 2024-25, with a volume-weighted average price far below USD 100; coverage has grown ~1pp/yr over the last decade (World Bank State and Trends of Carbon Pricing (annual)) Why it matters now: Transition-risk models embedded in TCFD scenarios quietly assume carbon prices the political record does not support — the gap is itself a mispricing. |
| 30% | An interstate armed conflict in which water access is a primary driver occurs by 2040 by 2040 · on the daily register at 37% The evidenceHistory says: No modern war has been fought PRIMARILY over water, but water has been a contributing driver in multiple conflicts (Indus standoffs, Nile/GERD escalation, Tigris-Euphrates tensions); basin-stress projections put 5+ major shared basins into severe deficit by the 2030s (Pacific Institute Water Conflict Chronology; WRI Aqueduct basin projections) Why it matters now: Water stress transmits into sovereign credit, food prices, and migration — three channels every long-horizon portfolio carries. |
How to read this page.
The Desk is the Probability Desk’s governed estimate — sourced base rates, live data feeds, and a public scoring record (methodology).
The market is what short-horizon market contracts (Polymarket, Kalshi) and bond and options markets imply — used strictly as a comparison object, never as a source of our estimates.
The Long Horizon questions are decade-scale estimates no market prices.
Metaculus is closed to automated access and is therefore not included — we say so rather than approximate it.
Part of the Probability Desk system: Command Center · Scenario Register · Scenario Lab.
Editorial analysis for long-duration capital — not investment advice.