Using LLM + Prediction Markets to create a narrative of the future months
How I read the news now
I’ve been experimenting with way to pull together prediction markets signals with LLM to create a narrative around the data. It is easier for me to read and remember a story than a stack of data. I have tried on crypto, stocks, geopolitics and politics—and now thinking to package them into straight to the point Substack updates. The same data point can be spun ten different ways (bullish, bearish, risk-on, risk-off…), so I’d love your take. I put an example at the end
What do you think about the method?
Which questions would you ask first? Crypto crash, Fed rate moves, election odds, trade wars…
What lens are you most curious about? Risk, opportunity, policy impact, societal shifts…
How would you want those stories framed? Quick headlines, deep dives, virtual interviews…
Bottom line: I need a bit of guidance to make these bullet-point digests as useful (and honest) as possible. What would you look for—and why?
For instance :
Question: "What would an historian studying 21st-century inflation interpret these prediction markets and odds s)"
Events Extraction: extraction of all the events that would be interesting for the study
Will the 10-year Treasury yield hit 5.2% in 2025?
• Source: Polymarket
• Price: 0.105
• Volume: 446,445.85
• End date: 2025-12-31Will Trump cut corporate taxes in 2025?
• Source: Polymarket
• Price: 0.075
• Volume: 383,797.31
• End date: 2025-12-31T12:00:00ZWill Trump cut long-term capital-gains tax in 2025?
• Source: Polymarket
• Price: 0.055
• Volume: 204,739.30
• End date: 2025-12-31T12:00:00ZWill inflation exceed 3% in 2025?
• Source: Polymarket
• Price: 0.58
• Volume: 597,331.92
• End date: 2025-12-31T12:00:00ZWill the US enter a recession in 2025?
• Source: Polymarket
• Price: 0.145
• Volume: 8,919,055.63
• End date: 2026-02-28T12:00:00ZWill China invade Taiwan in 2025?
• Source: Polymarket
• Price: 0.075
• Volume: 4,191,790.82
• End date: 2025-12-31T12:00:00Z
LLM interpretation: “You are an economic historian specializing in 21st-century globalization, supply chains, and trade conflicts. You’ve been given real-time prediction-market data as a primary source. Generate a complete document offering a sober, analytical interpretation of the trends revealed—suitable for a policy journal or academic working paper:
Results:
Working Paper: Economic History & Financial Sentiment
Author: An Economic Historian
Date: August 2025
Abstract
Thesis Statement: Prediction market data from 2025 reveals a global economic landscape characterized by anxious stability, where market actors discount the probability of acute, system-breaking crises but allocate significant capital towards hedging against a sustained era of high geopolitical friction, persistent inflation, and the continued strategic reconfiguration of global supply chains.
Key Findings:
Markets indicate a widespread expectation that major geopolitical conflicts in Ukraine and the Middle East will remain chronic, unresolved drags on the global system rather than escalating to a definitive conclusion or broader conflagration in the near term.
Sentiment points towards a fundamental shift in the US-China relationship, moving from integrated economic interdependence to a new normal of managed rivalry, characterized by entrenched protectionism and strategic decoupling, yet punctuated by pragmatic, high-level diplomatic engagement.
The macroeconomic consensus, as weighted by capital, anticipates a successful, albeit delicate, navigation of post-pandemic inflation, pricing in a modest economic slowdown and monetary easing but dismissing fears of a deep recession or a return to the pre-2022 low-interest-rate paradigm.
There is a notable lack of market confidence in near-term diplomatic breakthroughs or leadership changes in key autocratic states, signaling that global economic actors are adjusting to a multipolar world order defined by persistent geopolitical risk.
Anxious Stability: Geopolitical Risk and Economic Adaptation in 21st-Century Prediction Market Data
As primary source documents, prediction markets offer a unique, real-time window into the collective, capital-weighted expectations of an informed public. Unlike traditional polling, they compel participants to financially commit to their beliefs, providing a powerful, if imperfect, signal of consensus probabilities. The data from mid-2025 paints a nuanced picture of the global economic order—one not of imminent collapse, but of a grudging adaptation to a world of permanent friction. The dominant theme is one of "anxious stability," where the odds of catastrophe are low, but the capital wagered on those low odds is extraordinarily high, revealing a deep-seated unease with the structural integrity of the post-Cold War international system.
The New Normal of Chronic Conflict
The markets concerning the war in Ukraine and the conflict in the Middle East are highly revealing. With over $13 million wagered, the market for a "Russia x Ukraine ceasefire in 2025" sits at a low 20% implied probability. Shorter-term ceasefire markets are even more pessimistic. This suggests that market participants do not see a clear off-ramp for the conflict. It is viewed not as an event with a foreseeable conclusion, but as a structural condition. This chronic state of war is priced in as a persistent source of geopolitical risk, impacting energy prices, food security, and European defense spending for the foreseeable future. Similarly, the low probability of a near-term Israel-Hamas ceasefire (6% by August) versus a higher, yet still sub-50%, chance by the end of the year (47%) indicates an expectation of a grinding, attritional conflict that will continue to destabilize the region and threaten key maritime chokepoints, such as the Strait of Hormuz (priced at a non-trivial 10% chance of closure).
US-China: From Interdependence to Managed Rivalry
Perhaps the most critical story for global supply chains is the evolution of the US-China economic relationship. The data suggests a clear departure from the era of hyper-globalization. A market with high confidence (92%) indicates US tariff rates on China will remain elevated, suggesting that protectionism is now fully baked into the baseline assumptions of economic actors, regardless of the political administration. The odds of a full-scale military invasion of Taiwan in 2025 are deemed low at 8%, yet the $4.2 million in market volume signifies that this tail risk is a primary driver of corporate strategy, particularly around supply chain resilience and technological decoupling.
The data does not point to a new Cold War in the 20th-century sense of complete separation. Instead, it signals a more complex and volatile reality: a move towards a highly transactional, managed rivalry. Markets assign a 52% probability to a US presidential visit to China in 2025, suggesting that despite the tariffs and strategic competition, channels of communication are expected to remain open. This reflects an understanding that while full economic interdependence is a relic of the past, a complete severing of ties is both impractical and improbable.
Macroeconomic Headwinds: Navigating Inflation's Long Tail
Domestically, the economic picture is one of cautious optimism laced with persistent inflationary anxiety. The market for a "US recession in 2025" shows a low 14% probability, indicating that participants believe a soft landing is the most likely outcome. This is corroborated by the Federal Reserve markets, where the consensus points toward one or two modest rate cuts (22% and 38% probability respectively) by the end of 2025, a stark contrast to the aggressive easing cycles of previous decades. This signals an expectation that while the worst of the inflationary spike is over, it will remain stubbornly above the traditional 2% target (a 58% chance of inflation >3% in 2025). The era of free money is over. This "higher-for-longer" interest rate environment has profound implications for global capital flows, emerging market debt, and corporate valuations, representing a structural shift in the financial landscape.
In conclusion, the prediction market data of 2025 serves as a historical record of a world in transition. It reflects a collective psyche that has moved beyond the shock of recent crises—the pandemic, the invasion of Ukraine—and is now pricing in a future defined by their long-term consequences. The optimism of frictionless globalization has been replaced by the sober work of managing risk in a fragmented world. The lack of faith in near-term resolutions to major conflicts or dramatic leadership changes (Xi at 7-8%, Putin at 4%) underscores a belief that these new structural realities are here to stay. The primary activity is not forecasting a singular cataclysmic event, but rather adapting to a sustained environment of anxious stability.
Data Appendix: Primary Market Signals
Methodological Note: The following table presents a curated selection of the primary source data from the Kalshi and Polymarket prediction markets used for this analysis. The data reflects real-time, capital-weighted public sentiment on key geopolitical and economic events. Market questions that were deemed irrelevant to the core thesis of global economic and political trendshave been omitted for clarity.