Recession Odds Jump on Polymarket Following Tariff Moves

Market anxiety is surging after President Trump’s latest move to impose sweeping tariffs, with crypto-based prediction platforms now signaling a growing belief that a U.S. recession is on the horizon.

The probability of an economic downturn in 2025 has jumped significantly, triggering concern among traders and economists alike.

On-chain betting site Polymarket, known for its unconventional but often accurate forecasts, now places the odds of a 2025 recession at 57%. That’s a sharp increase from just a week ago when the chances had briefly dipped to 44%. The platform previously predicted Trump’s return to the White House, lending weight to its rising influence on market sentiment.

Since taking office again, Trump has revived a protectionist stance, implementing aggressive tariffs—25% on steel and aluminum and an eye-popping 245% on Chinese goods. This rapid policy shift has introduced new uncertainty into an already fragile global economy. Polymarket shows recession contracts trading higher, while “no recession” outcomes are being priced lower, reflecting the growing nervousness in the crypto-linked prediction space.

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Investment banks are also growing uneasy. Goldman Sachs has adjusted its recession outlook to 45%, and JPMorgan has gone further, assigning a 60% risk. Trump, however, remains firm in his belief that tariffs are a necessary tool to address trade imbalances, calling them “medicine” that the country must take.

Chances of a breakthrough in U.S.-China trade talks also look slim. Polymarket traders now estimate only a 38% likelihood of a deal being reached by June. At the same time, there’s a strong consensus—over 90%—that the Federal Reserve will keep rates unchanged in the near term.

Economists are now sounding the alarm on growth prospects. A new Reuters poll shows the risk of recession in the next year has surged to nearly 50%, doubling from the previous month. Expectations for 2025 GDP growth have been slashed from 2.2% to just 1.4%, the biggest downgrade in over a year. Analysts point to growing uncertainty under Trump’s leadership, where rapid policy shifts are making it harder for businesses to plan and invest.

Even the digital asset space, which had rallied initially during Trump’s return, is starting to feel the pressure. The total crypto market cap is holding above $2.6 trillion but has shown signs of strain. Bitcoin, the largest cryptocurrency, has lost over 11% in value over the past two months and is now trading around $85,000. Daily trading volume has also plunged, falling by nearly a third in the last 24 hours.

Alexander Stefanov