Will Pete Hegseth resign as Secretary of Defense by December 31?

Dan Driscoll's resignation as Secretary of the Army on September 1, 2026, after 18 months in the job, has reignited questions about stability at the top of the Pentagon. The next day, Senator Thom Tillis, a North Carolina Republican, urged President Trump to find a new leader for the department, effectively calling for Defense Secretary Pete Hegseth's removal.

Polymarket runs a contract on whether Hegseth is out as Secretary of Defense by December 31, 2026. 'Yes' is quoted at 22 cents. 'No' costs 78 cents.

According to the rules, 'Yes' settles if Hegseth stops being Secretary of Defense at any point through December 31, even on the basis of an announcement alone. A December statement that he will leave in March 2027 would resolve 'Yes' that day. A leave of absence does not count, nor does simply handing his duties to the deputy secretary. However, naming an Acting Secretary of Defense counts, no matter how brief the gap. 'No' pays only if Hegseth holds the office through December 31 with no departure announced.

The market is pricing a Hegseth departure at five times the rate implied by this Cabinet's own turnover. Three of the 15 department heads have left in the 19 months since January 2025, which Brookings counts as 20%. Convert that rate into the 118 days left to December 31, and you get roughly a 4% chance that any one secretary is gone by year-end. 'Yes' at 22 cents, a 22% implied probability, is, as mentioned, absolutely not a modest premium to that baseline.

The reason the contract is not sitting at 4% is that Trump's own party is starting to get irritated. House Armed Services Chairman Mike Rogers said he is "tired of all the churn" and wants stability. That churn now includes the Army itself. CBS reported that White House chief of staff Susie Wiles is running the search for Driscoll's successor, a personnel job Hegseth would normally lead.

However, Rogers and Tillis cannot fire the defense secretary. Only Trump can. And if Trump still wants Hegseth in the job, as of Monday, August 31, he said he did, then the Polymarket contract likely would not settle as 'Yes'.

When asked about a report that Hegseth might run for president in 2028, which Hegseth called "100% false", Trump said Hegseth is doing "a fantastic job" and that "we have to get through the midterms first." He said that before Driscoll's resignation was public and before Tillis asked for a replacement. The midterms are on November 3, which leaves 58 days of danger for No.

We think 'No' is the better and safer option on this board. For 'Yes', you need to believe Republican irritation plus the Army vacancy is enough to flip Trump before New Year's. But Trump praised him, the midterms are the near-term priority, and firing the defense secretary into an election and a live war is a decision that is quite unlikely, as it would create political chaos, which would only hand Democrats a ready-made argument that the Pentagon is leaderless when Trump most needs the opposite story.