Traders See 61% Chance of US Recession in 2025 After Tariffs

US Recession Prediction Market for 2025 Hits 61%

The latest prediction market insights reveal that Kalshi traders now estimate a 61% likelihood of a US recession by 2025, a number that surged following President Trump’s recent tariff announcement. This mounting concern reflects a swift deterioration in the macroeconomic outlook, prompting fears of a significant economic downturn.

Understanding the US Recession Prediction Market 2025

The recent surge in the odds of a US recession in 2025, now over 61% according to Kalshi traders, highlights significant market concerns driven by President Donald Trump’s recent tariff order. This prediction reveals a negative macroeconomic outlook, reminiscent of the 2008 financial crisis when unexpected market shifts drastically altered economic forecasts. The current situation is compounded by a series of similar trade disputes, echoing the challenges faced during past economic downturns.

As the US engages in an escalating trade war, fears of a prolonged recession are becoming tangible. Historical precedents remind us that tariff implementations often precede economic instability. Trump’s executive order established a 10% baseline tariff across all countries, sending shockwaves through capital markets and wiping out over $5 trillion in shareholder value. The impact of such sweeping policies on the US recession prediction market 2025 is profound, with traders responding to escalating risks and altered financial landscapes.

Today, as stakeholders navigate this unpredictable climate, the looming question remains: how will these economic decisions shape the future of the US economy?

Kalshi Traders Predict Over 61% Chance of US Recession in 2025

The likelihood of a US recession prediction market 2025 has surged dramatically, reaching 61% on the Kalshi prediction platform. This increase in anticipation follows President Donald Trump’s recent implementation of sweeping reciprocal tariffs. This executive order, signed on April 2, established a 10% baseline tariff rate for all countries, alongside differential rates for trading partners that already impose tariffs on American goods. The news triggered a swift sell-off in capital markets, erasing over $5 trillion in shareholder value within days.

Market Response and Economic Impact

Since March 20, traders on Kalshi have nearly doubled their odds of a recession in 2025, reflecting a stark decline in the macroeconomic outlook. Similar predictions align with data from Polymarket, where traders gauge the chances at 60%. As concerns escalate over a potential trade war, analysts fear such conditions could lead to a prolonged bear market, severely impacting global markets and suppressing asset prices, including cryptocurrencies.

Trump stated, “The markets are going to boom,” attempting to assure stakeholders that the long-term effects of the tariffs will stabilize the economy.
However, financial analysts like Anthony Pompliano argue the tariff strategy could intentionally force interest rates down by prompting a recession.

As evidence, interest rates on 10-year US Treasury bonds fell from 4.66% in January 2025 to 4.00% by April 5—a trend indicative of shifting market sentiments. Pressure is mounting on Federal Reserve Chairman Jerome Powell, as Trump continues to advocate for lower short-term interest rates. Ultimately, the trade landscape remains precarious, with traders and analysts closely monitoring developments to gauge the true likelihood of a US recession prediction market 2025.

Analysis of Kalshi’s US Recession Prediction for 2025

The recent announcement that Kalshi traders have placed the odds of a US recession in 2025 at over 61% underscores a growing sentiment of economic uncertainty in the market. Following President Trump’s implementation of reciprocal tariffs, which have led to a significant stock market sell-off, traders are adjusting their expectations regarding the US economy. The almost doubled recession odds since March reflect heightened fears of a prolonged downturn, particularly as analysts warn of a potential trade war that could adversely affect global markets.

This prediction not only impacts investor sentiment but also shapes future policy considerations, as Trump’s administration insists that such tariffs could eventually strengthen the economy. For the audience, particularly investors and policymakers, understanding these dynamics is crucial as they navigate an increasingly volatile economic landscape. The large predictions in the US recession prediction market for 2025 suggest that stakeholders may need to brace for potential market impacts and reassess their risk strategies moving forward.

Key Takeaways

Increased recession odds reflect deepening economic concerns.
Policy responses may become more aggressive as the administration seeks to stabilize the market.