Defense Secretary Pete Hegseth has fired Navy Secretary John Phelan during a live naval blockade in the Strait of Hormuz. Markets now price the likelihood of Trump announcing an end to operations by March 1 at 59% YES, down from 77% yesterday.
The firing complicates the timeline for Trump’s End of Military Operations Against Iran. The May 31 blockade lift market sits at 59% YES, down from 82% a week ago. Traders are pricing in growing skepticism about a quick resolution, driven by leadership instability at the Pentagon.
Liquidity in the blockade market is strong, with $32,536 in actual USDC traded daily. The order book shows $7,029 required to move the price 5 points, consistent with institutional-grade trading. The biggest recent move was a 3-point drop at 8:37 PM as traders reacted to the command shakeup.
Ex-CIA officer Larry Johnson called the firing “pettiness,” and it comes during an active military operation with no clear diplomatic offramp. At 41¢, a YES share on Trump lifting the blockade by May 31 pays $1 if it resolves, a 2.44x return. For that bet to make sense, you’d need to believe diplomatic breakthroughs will happen within 38 days despite the turnover at the top of the Navy.
Watch for statements from the Pentagon and CENTCOM; any strategic pivot could move these odds quickly. Trump’s response on social media, or silence, will also matter.
