Traders engaged in the Kalshi prediction market are currently estimating a 61% chance that the United States will experience a recession in 2025. This assessment follows the recent sweeping tariff order issued by President Donald Trump on April 2.
This probability aligns with the conventional definition of a recession, characterized by two consecutive quarters of declining GDP, as monitored by the U.S. Department of Commerce.
The likelihood of a recession has nearly doubled since March 20 and is now consistent with predictions from rival platform Polymarket, where traders are placing the odds at 60%.
Growing Concerns Over Trump’s Trade Policies
The significant uptick in pessimism among traders signals increasing anxiety about the potential economic consequences of the recently implemented trade policies.
Trump’s executive action includes a blanket 10% tariff on all imports, along with additional “reciprocal” tariffs aimed at trade partners imposing duties on U.S. goods.
This announcement has already caused turmoil in financial markets, resulting in a mass sell-off that has wiped out over $5 trillion in shareholder value within just a few days.
Market analysts caution that these tariffs could incite an extended trade war, amplifying economic uncertainty and impacting both conventional stocks and riskier assets like cryptocurrencies.
Concerns about a possible bear market and a broader macroeconomic slowdown are once again at the forefront of discussions.
UNITED STATES: Chances of US recession this year have risen further to 62% according to prediction market @Kalshi pic.twitter.com/xaXyZnKJif
— The Spectator Index (@spectatorindex) April 5, 2025
Despite the escalating worries, President Trump continues to assert that the tariffs will ultimately advantageous for the U.S. economy by addressing trade imbalances.
On April 3, he expressed confidence, stating, “The markets are going to boom,” while characterizing the abrupt market downturn as a temporary situation.
Some analysts, including asset manager Anthony Pompliano, have suggested that the market volatility may be intentional.
Pompliano posits that Trump might be leveraging market pressures to persuade the Federal Reserve to lower interest rates.
Backing this notion, the yield on 10-year U.S. Treasury bills has fallen from 4.66% in January to 4.00% as of April 5.
In a recent post on Truth Social, Trump urged Fed Chair Jerome Powell to respond to the situation, stating, “This would be a perfect time for Fed Chairman Jerome Powell to cut interest rates.”
In a previous analysis, Bitcoin commentator Anthony Pompliano indicated that the Trump administration might be deliberately creating market instability to influence rate cuts by the Federal Reserve.
He speculated that President Trump and Treasury Secretary Scott Bessent might be attempting to drive asset prices down to compel the Fed’s intervention regarding interest rates.
Significant Losses in U.S. Stock Markets
Recent reports indicate that U.S. stock markets have suffered an alarming $11 trillion decline since February 19, with losses intensifying on April 4 amid rising concerns regarding Trump’s extensive tariff measures.
The single-day market loss reached approximately $3.25 trillion, surpassing the total valuation of the global cryptocurrency market, which was reported at $2.68 trillion at that time.
Among the major tech stocks, often referred to as the “Magnificent 7,” Tesla faced the most significant drop, plummeting by 10.42%. Nvidia and Apple also witnessed steep declines, falling by 7.36% and 7.29%, respectively.
This extensive sell-off caused the Nasdaq 100 to decrease by 6% on that day, officially moving the index into bear market territory.
The post Recession Odds Surge to 61% on Kalshi After Trump’s Tariff Order appeared first on Cryptonews.
