Markets are seeing relief as a result of the US-China trade deal in Geneva. This has led critics to downgrade the chances of a US recession, which now stands at 40%.
Earlier today, the US-China agreed to relax tariffs for another 90 days. Current forecast market data shows that the likelihood of the US entering a recession in 2025 has fallen to its lowest level in months.
Compared to the 69.7% odds registered on the Kulshi marketplace earlier this month, these odds have now come down to 40%.
Did US Recession Avert With US-China Tariff Pause?
In a recent post on X, market commentator The Cubic Letter highlighted Kalashi's data on the likelihood of the US entering a recession in 2025.
The two sides have eased US-China tariff tensions by agreeing to a 90-day tariff easing plan.
As part of the deal, the US will cut tariffs on Chinese goods from 145 percent to 30 percent, while China will cut its tariffs on American products from 125 percent to just 10 percent.
It is important to note that this update came during the high-level talks in Geneva, where US Treasury Secretary Scott Besant led the US delegation. China's Vice Premier, He Lifeng, represented Beijing.
Besant affirmed that the two nations no longer seek economic dualism and instead focus on building a balanced trade relationship.
He noted that previous tariffs had effectively acted as a barrier, hurting trade on both sides. The US-China trade deal marks a significant shift from this hardline stance.
Shortly after the news broke, #Kalshi Data showed that the probability of a 2025 U.S. recession fell by about 2 percentage points to 43%.
At the start of the year, data showed the odds of a recession at 71%, reflecting deep concerns over inflation, supply chain disruptions and global uncertainty.
Mark Zindi, chief economist at Moody's, echoed that concern. Zandi warned of a possible US recession that led to significant crypto price declines earlier in the month.
Crypto Market Reaction to US-China Trade Deal
Financial markets responded with significant optimism. The Dow Jones and the Nasdaq made modest gains, while the price of $BTC surpassed $105,000.
At the time of writing, the top coin was changing hands at $102,894 on top of a slight 1.03% slip-off.
Bullish momentum is still intact with the coin's Relative Strength Index (RSI) at 64 and price trading above the 50-SMA.
The market outlook has fueled renewed optimism around trade and global economic stability in general.
As trade tensions ease, institutional and retail investors appear more willing to take on risk.
With global sentiment improving, attention is now focused on how this momentum will shape future policy meetings and whether more countries will pursue similar aid-for-trade efforts.
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