Business Sandesh Indian Newspaper | Articles | Opinion Pieces | Research Studies | Findings & News | Sandesh News
As markets react to renewed trade tensions and tariff talk from former President Donald Trump, bettors on the decentralized prediction platform Polymarket are now pricing in nearly a 50% chance of a U.S. recession by year-end.
The spike in recession odds comes after Trump floated a universal 10% tariff on all imports during a campaign speech — a policy proposal that rattled equities, crypto markets, and now, prediction markets.
“Polymarket users are signaling growing concern that escalating protectionism could tip the U.S. economy into contraction,” said one analyst tracking on-chain sentiment flows.
From Tariffs to Turbulence
Trump’s proposed tariffs, though not yet enacted, have already begun influencing expectations across both traditional and decentralized markets. Economists warn that sweeping import taxes could disrupt supply chains, drive up consumer prices, and pressure corporate margins — all ingredients for a potential economic slowdown.
Polymarket, which allows users to wager on real-world outcomes using crypto, has seen a sharp uptick in activity around recession-related contracts. The “Will the U.S. enter a recession in 2025?” market has surged, with odds climbing from ~30% to nearly 50% in just days.
Why Polymarket Matters
Unlike polls or analyst forecasts, Polymarket reflects where users are putting their money — not just their opinions. It’s often viewed as a real-time, crowd-sourced forecasting tool, with markets covering everything from politics and macroeconomics to crypto and pop culture.
In the past, Polymarket has successfully predicted key events — including election outcomes and Federal Reserve rate hikes — before traditional outlets fully priced in the news.
“Prediction markets are increasingly being used as early warning systems,” said [Insert Expert], “and a 50% recession probability should make both investors and policymakers take notice.”
What Traders Are Watching
-
Macro data: Upcoming jobs reports, inflation numbers, and consumer confidence surveys will all influence sentiment.
-
Federal Reserve policy: If tariffs begin to bite, traders expect the Fed to face pressure to cut rates more aggressively.
-
Election volatility: Trump’s campaign rhetoric is already creating uncertainty — and markets may stay shaky until November.
Crypto Ties In
Interestingly, crypto traders are also tracking Polymarket closely, as recession risks typically correlate with more dovish central bank policy — a potential tailwind for Bitcoin and digital assets. However, short-term macro anxiety has so far resulted in a broader risk-off pullback across both equities and crypto.
