US Recession Likelihood Soars on Prediction Markets After Trump Tariffs

Predictions markets are increasingly pointing to the likelihood of an economic recession in the U.S. this year, one day after U.S. President Donald Trump roiled global markets by unveiling a tariff policy that many economists say will undermine the global economy. 

A Polymarket betting pool shows there is a 50% chance the U.S. economy slides into a recession by the end of 2025, while a similar event contract operated by U.S.-based Kalshi puts those odds at 56%, as of the time of writing. On Wednesday, the platforms were forecasting odds of 40% and 43%, respectively, for a U.S. recession. 

Meanwhile, crypto-native trading platform Myriad Markets shows there is a 53.6% chance of a recession stateside. The market went live on Thursday, roughly a day after President Trump’s announcement. 

(Myriad Markets is a unit of Dastan, Decrypt’s parent company.)

The spike in recession odds on several prediction markets followed the White House administration’s unveiling Wednesday of an aggressive policy that calls for a 10% blanket tariff on U.S. trading partners. The tariffs are the bedrock of a controversial economic policy that President Trump has backed for months, saying that it would rectify unfair practices by U.S. trading partners and spur growth. 

“They will give us growth, these tariffs like we’ve never seen before,” Trump said in a White House Rose Garden ceremony on Wednesday. 

But a number of leading economists have warned that the policy would make goods more costly while stagnating the global economy. On Thursday concerns about these impacts sent markets spiraling with the tech-heavy Nasdaq and S&P 500 closing down nearly 6% and 5%, respectively. 

“We view this as kind of a growth shock… this is going to be a hit to U.S. consumers,” Ashish Shah, chief investment officer of public investing at Goldman Sachs Asset Management, said Thursday to news outlets in New York.

The Economist magazine was even more pointed. “Donald Trump has committed the most profound, harmful and unnecessary economic error in the modern era,” the magazine said of the policy. 

Meanwhile, recent economic indicators have pointed downward with the March Purchasing Managers’ Index, released earlier this week, showing prices increasing at their fastest rate since mid-2022 and factory activity contracting. Last week’s Conference Board’s consumer confidence index plunged to its lowest level in four years. 

Bitcoin and major altcoins have plummeted over the past day, with digital assets shedding more than $200 billion in market value. 

Edited by James Rubin