Traders on the Kalshi prediction market place the odds of a US recession in 2025 at 61%, following the sweeping tariff order signed by President Donald Trump on April 2.
Kalshi uses the standard criteria of a recession, two business quarters of negative gross domestic product (GDP) growth, as reported by the United States Department of Commerce.
Odds of a US recession on the prediction platform have nearly doubled since March 20 and mirror the current 2025 US recession odds on Polymarket, which traders on the platform currently place at 60%.
The macroeconomic outlook for 2025 deteriorated rapidly following US President Donald Trump’s sweeping tariff order and the ensuing sell-off in capital markets, sparking fears of a prolonged bear market.
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Trump’s executive order throws markets in disarray
The US President’s executive order established a 10% baseline tariff rate for all countries and different “reciprocal” tariff rates on trading partners with existing tariffs on US import goods.
Trump’s announcement triggered an immediate stock market sell-off, wiping away over $5 trillion in shareholder value in a matter of days.
Fears of a recession continue to grow as market analysts warn of a potentially protracted trade war that negatively impacts global markets and suppresses risk asset prices, including cryptocurrencies.
Meanwhile, President Trump has expressed confidence that the tariffs will strengthen the US economy long-term and correct any trade imbalances.
“The markets are going to boom,” the President said on April 3, describing the current market sell-off as an expected part of the process.
Asset manager Anthony Pompliano recently speculated that President Trump deliberately crashed markets to bring down interest rates.
Pompliano cited the reduction in 10-year US Treasury bonds as evidence that the President’s strategy of forcing a recession to impact rates is working.
Interest rates on 10-year US Treasury bonds declined from approximately 4.66% in January 2025 to just 4.00% on April 5. President Trump is also pressuring Federal Reserve chairman Jerome Powell to lower short-term interest rates.
“This would be a perfect time for Fed chairman Jerome Powell to cut interest rates,” Trump wrote in an April 4 Truth Social post.
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