Polymarket, a decentralized prediction platform, currently estimates a 56% probability that the U.S. will experience an economic recession in 2025 . This uptick in recession odds aligns with growing concerns among investors and economists, particularly following President Donald Trump’s recent implementation of sweeping tariffs.
Key Factors Influencing Recession Predictions
• Aggressive Tariff Policies: In early April 2025, President Trump announced extensive tariffs affecting a broad range of imports. These measures have intensified trade tensions, especially with China, and have been cited as a primary catalyst for market volatility .
• Market Volatility: Following the tariff announcements, major U.S. stock indices, including the S&P 500 and Nasdaq, experienced significant declines, marking one of the most substantial market downturns since 2020 .
• Consumer Confidence and Economic Indicators: Recent data indicates a decline in consumer confidence and a contraction in manufacturing activity. The March Purchasing Managers’ Index showed prices increasing at their fastest rate since mid-2022, coupled with decreasing factory activity .
Broader Market Sentiment
The heightened recession probability on Polymarket reflects a broader sentiment of economic uncertainty. Investors are closely monitoring policy developments, especially any potential adjustments to the newly imposed tariffs, which could significantly influence economic trajectories.
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