Traders assign a 97.5% probability to no U.S. invasion of Mexico in 2026 due to sustained bilateral security cooperation, Mexican government actions against cartels, and deep economic interdependence under the USMCA. Recent developments include Mexico's extraditions of over 90 high-level traffickers, joint intelligence operations, the killing of CJNG leader "El Mencho," and expanded U.S. aerial surveillance with Mexican consent. Rhetoric from U.S. officials about possible strikes on foreign terrorist organization-designated cartels has prompted increased Mexican deployments and policy concessions rather than confrontation. Full-scale invasion faces significant barriers, including sovereignty objections, diplomatic engagement between presidents, and absence of broad domestic support. Limited cross-border actions or escalated border enforcement remain possible within the year if cartel violence or trafficking surges sharply.