Trump's Customs Tax Shock Fuels 2025 Recession Fears: Betting Odds Rise Above 60%

Traders across major prediction markets are increasingly believing that the U.S. economy may fall into recession next year - largely thanks to the new comprehensive tariffs imposed by President Donald Trump. On Kalshi, a regulated prediction platform, the likelihood of an economic recession in the United States in 2025 is currently at 61%, marking nearly a doubling since March 20. Bets on recession surge after tariff announcement These figures are similar to those of the competing platform Polymarket, where users are currently pricing in a 60% chance that the United States will experience two consecutive quarters of negative GDP growth – the standard definition of a recession used by the U.S. Department of Commerce. The sudden shift in sentiment occurred after Trump’s executive order on April 2 imposing broad tariffs on all foreign imports, escalating tensions with major trading partners and causing panic in the capital markets. The consequences unfolded quickly: stocks plummeted, volatility surged, and safe-haven assets like gold and Bitcoin began to be bid up. This is what Pompliano said While this policy move has immediately faced criticism from economists and investors, some market commentators believe that this could be part of a larger political strategy. Notably, Anthony Pompliano, an investor and co-founder of Morgan Creek Digital, believes that Trump may intentionally destabilize the market to encourage the Federal Reserve to cut interest rates. Pompliano pointed out the decline in the yield of the 10-year U.S. Treasury bond, dropping from 4.66% in January to 4.00% on April 5, as evidence that investor expectations for interest rate cuts are rising. If Trump’s goal is to weaken the economy enough to force monetary easing before the election cycle, then it may have been effective. In a post on April 4 on Truth Social, Trump did not hesitate to pressure the Fed: “This would be the perfect time for Fed Chairman Jerome Powell to cut interest rates.” Direct calls like this to the central bank - especially in the context of increasing economic instability - could raise pressure on policymakers who are trying to balance controlling inflation and economic growth.