Despite low approval ratings and ongoing coalition frictions over tax, welfare, and economic reforms, traders assign an 84.5 percent probability that Friedrich Merz will remain chancellor through 2026. The CDU-SPD partnership, formed after the 2025 election, has no viable alternative majority in the Bundestag, and both parties recognize that early elections would likely boost the AfD. Merz has repeatedly ruled out a minority government or snap vote, most recently in early May, while diplomatic efforts including a recent call with U.S. President Trump have helped stabilize the foreign-policy front. Historical patterns of German coalitions enduring procedural pressures until the next scheduled federal election in 2029 reinforce the current market positioning.