Calshi Betting Right Now is for 300K Reduction in Force for the Federal Government (H/T Torsten Sloke):
Figure 1: Nonfarm Payroll Employment (Bold Black), SPF forecast (Light Blue), implied end-2025 with Kalshi Bet or 2/23 (Green Square), Assuming 2 Contractors for Each Federal Worker per Square, All in 000’s. Source: BLS via Fred, Philadelphia Fed, Kalshi (2/23/2025), T.SLOK, AND AUTHOR’S CALCULATIONS.
Personally, I don’t worry as much about the macro impact of less workers as much as the disruption and uncertainty Engendered (including the planes start falling out of the Sky…)
Figure 2: EPU (Blue), Trade Policy Uncertainty (Brown). Source: policyuncertainty.com.
According to Caldara et al. (JME, 2020), a rise in trade policy uncertainty (TPU) equal to that in the 2018 trade war decreases investment at 1.5%. Well, from February to July 2018, TPU Rose at 189. From October 2024 to January 2025, TPU has risen by… 194.
Add tpu, cutting jobs, erratically declared and capricious implemented tariffs, and mass deportations, well, then one can worry about the macro outlook.