Polymarket: Recession Bets Soar to 57%
Donald Trump’s tariff bombshell has sent online betting markets into a frenzy. As a direct consequence, the odds of a US recession in 2025 have dramatically increased, and crypto traders are already anticipating this economic downturn.
Polymarket, known as the ‘wild west’ of crypto prediction markets, is now sounding alarm bells about the economy, with a stark ‘red warning’. The platform currently estimates a 57% chance of a recession in 2025. These odds are on the rise again after a brief dip to 44% last week. Interestingly, Polymarket accurately predicted Trump’s 2024 victory.
Trump’s tariffs push recession odds to 57%
Since his return to office, President Trump has aggressively promoted a ‘Made-in-USA’ agenda, publicly criticizing countries he accuses of ‘ripping off’ America. In a matter of weeks, the US economic landscape has shifted from stability to uncertainty. Sweeping tariffs have been imposed, including 25% on steel and aluminum, and a hefty 245% on Chinese imports.
Polymarket data reveals that bets predicting a recession are currently priced at 57 cents, while ‘no recession’ bets are at 43 cents. The recession odds previously reached a peak of 64 cents, with ‘no recession’ at 36 cents. The platform recorded a high of 66% recession probability on April 9th. Although sentiment briefly improved after this peak, the prevailing uncertainty has caused the odds to climb once more.
Even major financial institutions are feeling the impact. Goldman Sachs now projects a 45% recession risk, and JPMorgan Chase estimates it at 60%. Meanwhile, President Trump remains resolute, recently referring to tariffs as ‘medicine’ and stating they will remain until trade deficits are ‘cured’.
The odds of a US-China trade agreement before June are currently at 38%. Bets on a deal are priced at 38 cents, while ‘No deal’ is at 63 cents. However, Polymarket traders overwhelmingly anticipate the Federal Reserve will hold steady, assigning a 91% probability to unchanged rates and only an 8% chance of a 25 basis point rate cut.
Economists slash US growth to 1.4%
Recession fears are escalating rapidly in the US. A recent Reuters poll indicates economists now estimate nearly a 50% chance of a US recession within the next 12 months, a sharp jump from just 25% a month prior. President Trump’s 90-day pause on new tariffs appears to have had little impact on these growing concerns.
Rising inflation expectations have prompted economists to significantly reduce US growth forecasts. The US economy is now projected to grow by a mere 1.4% in 2025, a considerable drop from the 2.2% forecast just last month – the most significant downgrade since mid-2022. Economists point to uncertainty as the primary driver of this economic anxiety, noting that businesses are hesitant to invest or hire when policy changes can occur abruptly. This unpredictability is becoming a hallmark of President Trump’s economic approach.”
The global digital asset market, which initially reacted positively to President Trump’s administration, is now also feeling the pressure. While the total cryptocurrency market capitalization remained slightly up on Saturday at $2.69 trillion, Bitcoin, the leading cryptocurrency, has declined by over 11% in the last 60 days. At the time of writing, BTC is trading at an average price of $85,273, and its 24-hour trading volume has decreased by 32% to $12.4 billion.
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