2025 US Recession Odds Surge Past 60%
Prediction markets are signaling a heightened concern about a potential US recession in 2025. Kalshi, a prediction market platform, places the odds at over 61%, a near doubling since March 20. This mirrors Polymarket's assessment, which shows similar odds at 60%.
Rising Recession Probabilities
The increased likelihood of a recession follows President Trump's sweeping tariff order in April 2025. This order, imposing a 10% baseline tariff and variable rates based on reciprocal tariffs, triggered a significant sell-off in the stock market, wiping out over $5 trillion in shareholder value.
Kalshi and Polymarket utilize the standard definition of a recession: two consecutive quarters of negative GDP growth as reported by the US Department of Commerce.
Market Reactions and Expert Opinions
Market analysts are expressing growing concerns about a prolonged trade war, negatively impacting global markets and suppressing risk assets, including cryptocurrencies. While President Trump remains optimistic about the long-term economic benefits of the tariffs, the immediate market reaction has been overwhelmingly negative.
Asset manager Anthony Pompliano has speculated that the President's actions might be a deliberate strategy to force lower interest rates. He points to the decline in 10-year US Treasury bond yields from approximately 4.66% in January 2025 to 4.00% on April 5 as evidence. President Trump has also publicly urged Federal Reserve Chairman Jerome Powell to cut short-term interest rates.
Economic Uncertainty and Implications
The current economic climate presents considerable uncertainty. The combination of increased trade tensions and the possibility of a recession is generating significant market volatility. This situation highlights the importance of sound risk management and due diligence, particularly in the volatile cryptocurrency market.
Codeum, a leading blockchain security and development platform, offers comprehensive services to navigate these challenges. We provide smart contract audits, KYC verification, custom smart contract and DApp development, tokenomics and security consultation, and partnerships with launchpads and crypto agencies. Contact us to learn how we can assist you in mitigating risks and capitalizing on opportunities in the evolving blockchain landscape.