Which agencies will Trump eliminate?

**Stage 1 — Blind analysis (ignore market prices):**

Based solely on the publicly available context and historical patterns, elimination of USAID is plausible but unlikely. The administration has shown a clear preference for downsizing, reorganizing, and aggressive personnel reductions across many agencies, and that ideological posture increases the baseline risk to independent federal agencies. However, abolishing USAID entirely would be a large, visible foreign-policy move with major operational, legal, congressional, and international consequences. Historically, even administrations with strong deregulatory impulses have found it difficult to fully eliminate agencies that perform essential humanitarian, development, and security-adjacent functions because doing so invites bipartisan pushback, complicates ongoing international obligations, and creates risks during crises (natural disasters, famine, conflict) when visible U.S. capacity is needed.

Key considerations in the blind analysis: the administration can pare budgets, starve functions, or move staff via hiring/Deferred Resignation Program-style tactics; it can attempt to fold functions into the State Department or Defense, which might look like elimination but preserves core capabilities. Legislative elimination would require substantial cooperation from Congress for statutory repeal and appropriations, which is not guaranteed even with a Republican trifecta because many Republicans value foreign assistance for geopolitical reasons and because USAID has built constituencies among NGOs, contractors, humanitarian groups, and foreign partners.

I weigh the combination of strong executive appetite for cuts against the high political, operational, and diplomatic costs of outright elimination. That yields a relatively low independent probability: **~18%** that USAID will be *fully eliminated* (not just restructured or defunded) by 20 Jan 2029.

**Stage 2 — Market calibration (look at current market prices):**

The market currently prices Yes at 39% and No at 61% (volume ~174k contracts). My independent probability (18%) is materially lower than the market's 39% Yes price. Possible reasons the market is higher:

- Traders may be extrapolating from the administration's broader anti-agency pattern and assuming elimination is simply a continuation of that trend, conflating heavy downsizing or absorption with outright elimination. - Markets sometimes overweight tail-risk political outcomes during an administration that has repeatedly pursued unconventional governance moves; that can push subjective probabilities up even where structural barriers exist. - Information asymmetry: some traders may have access to advocacy chatter, private reports, or insider signaling that they interpret as stronger intent to abolish USAID than publicly visible evidence supports. I find no public corroboration of such signals in the available news. - Market momentum and narrative risk: high-volume speculation can create a self-reinforcing pricing loop where liquidity and direction push the price away from fundamentals.

Given these points, I believe the market is overpricing the elimination outcome. The most plausible market mispricing is conflation of major restructuring, staffing cuts, or rebranding with full statutory elimination. If one wanted to trade against the market here, the economic case would be that elimination faces significant political and operational friction that historically prevents many administrations from taking that final step.

However, the market is not crazy to assign a non-trivial chance: if the administration secures strong congressional allies, links elimination to a broader legislative package, or uses an administrative pathway (transfer of statutory authority plus de facto absorption) the probability could move substantially higher than my baseline. That is the main channel through which the market's higher price could be rational.