Short Answer

Both the model and the market expect the U.S. federal deficit-to-GDP to be below 5% for FY2026, with no compelling evidence of mispricing.

1. Market Behavior & Drivers

This market exhibits a stable, sideways trading pattern, consistently pricing the probability of the U.S. federal deficit-to-GDP ratio falling below 5% for FY2026 at very low levels. The price has remained within a tight range of 5.0% to 8.0% throughout its history. This narrow consolidation suggests a strong consensus among market participants. Key levels have been established with apparent resistance at the 8.0% mark and support near the 5.0% level. The current price of 6.0% sits near the lower end of this range, indicating sustained pessimism. Given the lack of specific news or economic data provided, the minor fluctuations within this range cannot be attributed to any particular external events.
The total trading volume of 1,470 contracts is modest, but the patterns are informative. Early price points showed zero volume, suggesting they were initial offers rather than active trades. A notable volume spike of 50 contracts occurred on April 29th, coinciding with a price drop to 6.0%, which could indicate a period of increased conviction or price discovery. Overall, the combination of a low, stable price and modest volume suggests a confident and unwavering market sentiment. The market consensus is that there is a very low probability, consistently less than 10%, of the federal deficit-to-GDP ratio meeting the sub-5% threshold in fiscal year 2026.
  • CBO revenue estimates for FY2026 account for expiring tax provisions.
  • CBO projects lower nominal GDP growth for FY2026 compared to SPF.
  • Higher interest rates significantly impact CBO's federal deficit projections.
  • White House proposes $807 billion for FY2026 non-defense discretionary outlays.

Who Wins and Why

Outcome Market Model Why
Below 5% 6.0% 2.7% Sustained economic growth could boost tax revenues and expand GDP, reducing the deficit-to-GDP ratio.

2. Price Chart

Historical Price (Probability)

Outcome probability
Date

3. Market Data

Contract Snapshot

The market resolves to YES if the U.S. federal budget deficit as a percentage of GDP for fiscal year 2026 is below 5%, as reported in the U.S. Treasury / Office of Management and Budget Joint Statement on Budget Results; otherwise, it resolves to NO. The market opened on March 11, 2026, and will close and expire early upon the release of this economic data, or by October 20, 2026, at 8:29 am EDT at the latest, with projected payouts 30 minutes after closing.

Available Contracts

Market options and current pricing

Outcome bucket Yes (price) No (price) Last trade probability
Below 5% $0.07 $0.94 6%

Market Discussion

Limited public discussion available for this market.

4. Trust Index

Octagon Trust Index Kalshi 59 Caution

Primary risk· Trade quality

How it adds up
Integrity80% of score73Good

Info fairness is low (40), but Integrity averages all three scores, so the other two pull it up. Only a critically low score would cap the total.

Trade quality20% of score3Avoid

Includes the cost to trade: a $10,000 order loses about 1749% of the price to slippage.

Trust score59Caution

Weighted blend with hard caps — a critically weak safety pillar, or a severe trading anomaly, caps the total regardless of the rest. Full methodology · About the Trust Index

Trust profile
Integrity4 screens run · 3 don't apply · 3 awaiting data
Market integrity
93Strong

Outcome is hard to influence

No suspicious activity on any screen

Screened clean
Large tradesNo single trade dominates the tape. Clear
Thin-volume movesMoves carried volume Clear
Size patternsNo distribution read Clear
2 screens not run
Outcome control · doesn't apply to this market type
Thin-leg conviction · doesn't apply to this market type
Info fairness
40High Risk
Information exposureStructural risk · medium confidence

Scheduled statistical release: the agency holds the number before publication

4 screens not run
Move vs. catalyst · data source not connected
Longshot repricing · data source not connected
Pre-broadcast certainty · doesn't apply to this market type
Cross-venue timing · data source not connected
Resolution quality
92Strong

Resolution mechanism is dependable

No suspicious activity on any screen

Resolution rules read: Clear

Liquidity
4Very thin

Hard to fill near the screen price

1 contract

Below 5%4
Very thin · low confidence

Light recent trading — size may not fill near the screen price.

Move quality
76Confirmed

Moves came with real volume

1 contract

Below 5%76
Confirmed · medium confidence

Volume confirms the move over 24h

Rule clarity
95Clear

Counts toward Resolution quality, not here

1 contract

Below 5%95
Clear · high confidence

Objective result from a trusted source (allowlist)

allowlist · Clear
Trade quality
3Avoid

Thin market — entering or exiting at fair value will be difficult.

Outcome quality 4 (notional-weighted)

$100 order: 3.9c slippage (~87% of a 4.5c contract)

$1,000 order: 32.6c slippage (~724% of a 4.5c contract)

$10,000 order: 78.7c slippage (~1,749% of a 4.5c contract)

Below 5%4Market scoreLiquidity4Move quality76Rule clarity95
Why 4
Liquidity
4 · Very thin · low confidence

Light recent trading — size may not fill near the screen price.

Move quality
76 · Confirmed · medium confidence

Volume confirms the move over 24h

Rule clarity
95 · Clear · high confidence

Objective result from a trusted source (allowlist)

allowlist · Clear

underwriting_v1.4 · computed Sep 23, 2026

5. How Would TCJA Extension Affect FY2026 Federal Revenues?

Baseline FY2026 Federal Revenues$5,246 billion (assuming TCJA expiration) [1]
Projected FY2026 Federal Revenues$4,988 billion (with full TCJA extension) [1]
Revenue Reduction for FY2026$258 billion (compared to baseline with full TCJA extension) [1]
The Congressional Budget Office (CBO) estimates federal revenues for fiscal year 2026, considering the expiration of certain tax provisions [1]. Specifically, the individual income tax provisions and changes to the estate and gift tax provisions of the 2017 Tax Cuts and Jobs Act (TCJA) are set to expire at the end of calendar year 2025. Under the CBO's baseline projections, which assume these provisions expire as scheduled, federal revenues are projected to reach $5,246 billion in FY2026 [1].
Extending TCJA provisions would significantly reduce FY2026 federal revenues. If lawmakers were to fully extend these specific TCJA provisions, the CBO's "Alternative Fiscal Scenario" projects that federal revenues in FY2026 would instead be $4,988 billion [1]. This projection, detailed in the CBO's May 2024 report, "Budgetary Outcomes Under Alternative Assumptions About Spending and Revenues," represents a $258 billion decrease in federal revenues for FY2026 compared to the CBO's baseline assumption of expiration [1].
Sources (1)
  1. 1Budgetary Outcomes Under Alternative Assumptions About Spending and Revenuescbo.gov

6. How Do Higher Interest Rates Impact Federal Deficit Projections?

Interest Rate Increase Scenario1 percentage point higher than baseline (2025-2034) [1]
FY2026 Deficit-to-GDP Increase0.7 percentage points larger than baseline [1]
FY2026 Deficit-to-GDP Increase (Basis Points)70 basis points [1]
The Congressional Budget Office (CBO) explored the budgetary implications of higher interest rates. In its report, "The Long-Term Budget Outlook Under Alternative Scenarios for the Economy and the Budget," the CBO conducted a sensitivity analysis. This analysis examined a specific scenario where interest rates on federal debt consistently remained 1 percentage point higher than the CBO’s baseline projections for all years from 2025 through 2034 [1].
Higher interest rates significantly increase the 2026 deficit-to-GDP ratio. Under this alternative scenario, the CBO projected a notable impact on the federal deficit for fiscal year 2026. The deficit-to-GDP ratio for that year is anticipated to be 0.7 percentage points larger than the baseline projection [1]. This increase is equivalent to 70 basis points, highlighting the considerable effect elevated interest rates could have on the federal deficit [1].
Sources (1)
  1. 1The Long-Term Budget Outlook Under Alternative Scenarios for the Economy and the Budgetcbo.gov

7. How Do CBO and SPF Nominal GDP Forecasts Compare for FY2026?

CBO FY2026 Nominal GDP Growth4.4% [1]
Philadelphia Fed SPF FY2026 Nominal GDP Growth4.8% [2]
Difference (CBO vs. SPF)0.4 percentage points lower [1]
The CBO projects lower nominal GDP growth for FY2026. The Congressional Budget Office (CBO), in its February 2026 Budget and Economic Outlook, forecasts nominal Gross Domestic Product (GDP) to grow by 4.4% in fiscal year 2026 [1]. This projection is an important factor for calculating economic ratios, such as the federal deficit-to-GDP.
The SPF consensus indicates higher FY2026 nominal GDP growth. In contrast, the Philadelphia Fed's First Quarter 2026 Survey of Professional Forecasters (SPF) shows a median consensus forecast of 4.8% for nominal GDP growth in fiscal year 2026 [2]. This survey compiles predictions from a panel of professional economists, providing a widely recognized consensus view on future economic indicators [3].
CBO's FY2026 nominal GDP projection is 0.4 percentage points lower. The CBO's current projection of 4.4% for nominal GDP growth in FY2026 is 0.4 percentage points below the 4.8% consensus forecast provided by the Philadelphia Fed's Survey of Professional Forecasters [1].
Sources (3)
  1. 1The Budget and Economic Outlook: 2026 to 2036ideas.repec.org
  2. 2https://www.philadelphiafed.org/-/media/FRBP/Assets/Surveys-And-Data/survey-of-professional-forecasters/2026/spfQ126.pdfphiladelphiafed.org
  3. 3Survey of Professional Forecastersphiladelphiafed.org

8. What is the Non-Defense Discretionary Budget Difference for FY2026?

White House FY2026 Non-Defense Discretionary Outlays$807 billion [1], [2]
Republican Study Committee FY2026 Non-Defense Discretionary Outlays$590 billion [3]
Dollar-Value Difference$217 billion [4]
The White House proposes $807 billion for non-defense discretionary outlays in FY2026. The most recent White House budget proposal designates $807 billion for non-defense discretionary spending for Fiscal Year 2026 [1], [2]. This amount is part of an overall $1,702 billion discretionary budget request, which also includes $895 billion for defense discretionary spending [1]. This proposed level for non-defense discretionary funding aligns with the President's previous proposals for FY2025 [2].
The RSC's FY2026 budget proposes $590 billion for non-defense discretionary outlays. In contrast, the official budget proposal from the Republican Study Committee (RSC) projects non-defense discretionary outlays to be $590 billion for Fiscal Year 2026 [3]. The RSC's total discretionary spending proposal for FY2026 amounts to $1,500 billion, with $910 billion designated for defense discretionary spending [3].
A $217 billion difference exists in non-defense discretionary outlays for FY2026. This disparity represents the dollar-value difference in planned non-defense discretionary outlays for Fiscal Year 2026 between the White House budget proposal and the Republican Study Committee's budget proposal.
Sources (4)
  1. 1https://www.whitehouse.gov/wp-content/uploads/2025/05/Fiscal-Year-2026-Discretionary-Budget-Request.pdfwhitehouse.gov
  2. 2Tight 2026 Non-Defense Funding Rejects Trump’s Proposed Deep Cuts, But Congress Will Need to Continue to Guard Against Administration Abuses | Center on Budget and Policy Prioritiescbpp.org
  3. 3https://rsc-pfluger.house.gov/sites/evo-subsites/republicanstudycommittee.house.gov/files/evo-media-document/final_rsc_budget.pdfrsc-pfluger.house.gov
  4. 4https://www.whitehouse.gov/wp-content/uploads/2025/05/President-Trumps-Fiscal-Year-2026-Discretionary-Funding-Request-Overview.pdfwhitehouse.gov

9. When is the CBO's 2026 Budget and Economic Outlook Release Date?

Report TitleBudget and Economic Outlook [1]
Release Date and TimeWednesday, February 11, 2026, at 12:00 PM [1]
Key ContentInitial FY2026 federal deficit projections [1]
The Congressional Budget Office will release its initial 2026 Budget and Economic Outlook. This highly anticipated report is scheduled for Wednesday, February 11, 2026, at 12:00 PM [1]. It is considered a primary market-moving catalyst due to its comprehensive nature and its inclusion of crucial near-final projections for the Fiscal Year 2026 federal deficit [1]. These projections are key for prediction markets concerning the U.S. federal deficit-to-GDP ratio for FY2026 [1].
Multiple organizations have confirmed the CBO report's release date. The February 11, 2026, release date for the CBO's outlook has been referenced and confirmed by reputable organizations, including the Committee for a Responsible Federal Budget (CRFB) and the American Action Forum [1]. Following this foundational report, additional analyses are expected, such as a chartbook on the February 2026 CBO Baseline, which will offer further insights into the projections provided on this date [2].
Sources (2)
  1. 1CBO’s February 2026 Budget and Economic Outlook-Wed, 02/11/2026 - 12:00 | Committee for a Responsible Federal Budgetcrfb.org
  2. 2Chartbook: The February 2026 CBO Baseline: What It Says (and What It Means)-Wed, 02/18/2026 - 12:00 | Committee for a Responsible Federal Budgetcrfb.org