Given persistent reports regarding the possibility of Ukraine’s President Volodymyr Zelensky accepting to freeze the war along its current frontline in exchange for Western security guarantees, we would emphasize that while the ‘plan’ may seem simple and straightforward, it faces two (in our view near-insurmountable) challenges:

• 1) Western countries do not have the appetite to offer Ukraine the kind of truly meaningful security guarantees Kyiv is after.
  • Nor could Ukraine and its partners ‘pretend’ to agree on symbolic security guarantees, given Russia in that instance would almost certainly instantly prove their emptiness by poking holes in the frontline.
• 2) Russia, given its current upper hand in the conflict, would have little to no incentive to accept such an agreement even if it were on offer.

As we mentioned in our latest update yesterday, we believe that a negotiated resolution to the war remains out of reach for the foreseeable future, even under the (non-basecase) possibility of a Trump win in the US election.

• We do, however, recognize that its odds would be far higher under a Trump 2.0 presidency (35%) than a Harris one. Indeed, while Russia would, even then, still not have a strong structural incentive to agree to end a war it (believes it) is winning, three considerations could lead Moscow to a deal:
  • 1) Russian President Vladimir Putin could agree to a ceasefire as a ‘personal favor’ to President Donald Trump, with the understanding in the back of his mind that he will always have the option to resume fighting ‘down the road’ if he so wishes.
  • 2) The Kremlin could ‘welcome’ (or pretend to welcome) a peace agreement as a way of actively leading to domestic political chaos inside Kyiv (given the likely internal dissention within Ukraine over the merits of such a deal) – particularly considering that a strong argument can be made that stirring chaos inside Ukraine is a more salient war goal to Russia than taking over Ukrainian territory ever was.
  • 3) A Trump administration could succeed in ‘forcing’ Russia to cave, not by being so ‘friendly’ to the Kremlin – as Trump is often accused of – but rather by threatening it with severe sanctions (incl. on its central bank), as former Trump National Security Advisor Robert O’Brien has hinted at.