U.S. Recession Odds on Polymarket Plunge to 22% as Trade Tensions Cool
2025-07-05 15:17:54
Main Idea
Bets on a U.S. recession in 2025 have dropped sharply, with odds on crypto prediction platform Polymarket sinking to 22%, the lowest level, as trade tensions cool and economic indicators improve.
Key Points
1. Perceived odds of a U.S. recession peaked at 66% in April 2025 but have since plunged to 22% on Polymarket.
2. The GDPNow indicator predicted a 1.5% contraction for Q1 2025, but the actual fall was softer at 0.5%.
3. Goldman Sachs initially put recession odds at 45% in April but later cut its 12-month recession odds to 30%.
4. Market concerns were fueled by trade tensions and the Fed's decision to slow the pace of shrinking its balance sheet.
5. A recession bet on Polymarket pays out if the NBER declares one or if the U.S. posts two straight quarters of negative GDP growth.
Description
Bets on a U.S. recession in 2025 have dropped sharply, with odds on crypto prediction platform Polymarket sinking to 22% this week, the lowest level since late February. Recession fears ballooned earlier this year when the Atlanta Federal Reserve’s GDPNow indicator predicted a 1.5% contraction for the first quarter of the year, while the actual fall was softer at 0.5%. Tensions escalated in March as U.S. President Donald Trump announced a series of reciprocal tariffs on what he branded “ Liberat...
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