Recession Fears Spike: Polymarket Odds Top 50% After Market Tumble

Recession chatter is heating up again — and this time, it’s not just economists raising red flags. Polymarket bettors have now pushed U.S. recession odds above 50%, as Wall Street reels from a sharp two-day selloff that wiped billions off the markets.

The spike in recession predictions on the decentralized betting platform follows a brutal stretch for equities, driven by renewed inflation worries, rate cut doubts, and broader global instability. The S&P 500 and Nasdaq both posted back-to-back losses, igniting fears that the economy may be heading for a hard landing after all.

On Polymarket, a popular crypto-powered prediction market, the contract asking whether the U.S. will enter a recession by the end of 2025 saw odds soar to over 50%, signaling a notable shift in sentiment. Just a few weeks ago, those same odds were hovering near 30%.

Analysts say the sudden change in mood reflects a growing realization that the Federal Reserve may keep rates higher for longer — tightening financial conditions just as economic momentum appears to be cooling.

“Markets are waking up to the idea that inflation isn’t going quietly, and that could force the Fed’s hand,” said one analyst. “Polymarket is often a good early signal of where the crowd thinks things are headed.”

While official data still shows a resilient labor market and decent consumer spending, forward-looking indicators — and now, the wisdom of the crowd — are starting to flash warning signs.

Whether or not the recession materializes, one thing’s clear: investor anxiety is back, and it’s being priced in — on Wall Street and on-chain.