Polymarket odds of a U.S. recession in 2025 surged from 42% to 52% on April 3, marking the sharpest single-day increase in recession probability on the prediction market this year.
At the start of March, the odds sat at just 21%, meaning the chances of a recession have increased by over 130% in 30 days.
The shift followed the announcement of a sweeping new trade policy imposing a universal 10% tariff on all imports and targeted “reciprocal” tariffs of up to 48% on goods from 60 countries.
The policy eliminates exemptions for categories typically protected from such measures, including raw materials, medical supplies, and critical industrial inputs.
As a result, economists are raising concerns over a compounded economic impact across multiple vectors: rising input costs, fragile supply chains, and declining consumer demand.
In the near term, the tariffs introduce inflationary pressure through cost pass-through effects on goods such as electronics, automotive parts, and construction materials.
With core inflation already elevated and interest rates remaining high, the added price shocks could suppress real disposable income and erode demand, particularly across lower-income demographics.
Supply chain vulnerabilities are also magnified under the new regime. Many of the targeted imports lack domestic production capacity, and rapid onshoring or nearshoring alternatives remain structurally out of reach in 2025. This misalignment has intensified investor skepticism over the policy’s feasibility and economic rationale.
Despite the administration’s framing around reindustrialization and strategic leverage, analysts have pointed out that the tariff figures used to justify the reciprocal framework appear inconsistent with World Trade Organization and World Bank data.
That discrepancy has fueled questions about the credibility of the underlying assumptions, contributing to volatility in prediction markets like Polymarket.
#Chance #recession #year #surges #Polymarket #overnight #hitting
