President Trump’s tariff plan has caused the prediction platforms Polymarket and Kalshi to raise concerns of a US recession.
Polymarket stated that the US recession in 2025 is likely to surpass 50% with Yes shares surging from 39 cents to over 50 cents in less than 24 hours. Kalshi also reports a rise in recession probability to 54% from 40%.
Financial markets are reacting to this, sending Bitcoin and other related assets lower, with the S&P 500 futures down by 3% and Bitcoin falling 1.5% to $83,100.
Trump’s tariff plan, which is set to take effect on April 5, will impose a 10% base rate on all imports, with higher taxes on 60 nations. With China having the highest total tariff of 54%. Trump’s administration aims to rectify trade deficits; the tariffs may lead to domestic inflation and global instability.
However, some experts, like UBS, believe the tariff uncertainty might only cause an economic slowdown, not a full-blown recession. They predicted the US economy will expand by around 2% this year, despite slower growth.
Others argue that the tariffs are dovish, meaning the initial risk-off reaction could be short-lived, and expectations of Federal Reserve interest-rate cuts may reverse the trend.
President Trump’s proposed tariff plan is creating significant economic uncertainty, which is seen in financial markets and prediction platforms, with a notable increase in recession predictions. Currently, I think the effects of the tariffs are still unfolding from the recent market conditions. Even though it’s not clear if it will last for long, looking at it from the angle of how interconnected the global economy is, a large economic change in the US will likely cause global ripples.