Market sentiment is shifting sharply as decentralized prediction platform Polymarket reports a surge in recession bets. As of April 3, 47% of traders now believe the U.S. will enter a recession in 2025—a dramatic rise from just 20% in January.
Recession Forecasts Spike Following Tariff Shock
The shift in sentiment comes on the heels of former President Donald Trump’s “Liberation Day” trade policy announcement, which introduced steep tariffs across multiple sectors. Just a week earlier, on March 28, only 33% of traders anticipated a recession—underscoring how rapidly economic expectations have deteriorated.
Trump’s Trade Stance Sends Global Markets Reeling
Speaking from the White House Rose Garden on April 2, Trump outlined the rationale behind the sweeping tariffs:
“Our country has been looted and plundered for decades… Our steel workers, auto workers, farmers, and craftsmen have suffered gravely,” he said.
The tariffs, pitched as a revival plan for American manufacturing, triggered sharp sell-offs across U.S. equity markets:
- Dow Jones: -1,300 points
- Nasdaq: -4.1%
- S&P 500: -3.3%
Global markets also saw volatility, as investors grew concerned about rising costs, supply chain disruption, and broader economic deceleration.
Consumers Could Bear the Brunt
A report from The Budget Lab at Yale University estimates that U.S. households may see their annual expenses increase by $2,700–$3,400, due to higher import prices and raw material costs.
A High-Stakes Gamble
While Trump remains committed to the strategy, calling it a necessary step to restore U.S. industry, critics say it comes at significant macroeconomic risk.With recession odds now hovering near 50% on Polymarket, concerns are mounting that this policy shift could tip the U.S. into contraction. Whether it leads to long-term gains or short-term pain will depend on how markets and consumers respond in the coming months.
