Is a US recession a long shot?

Five charts to start your day

Good morning – here are your five chart for the day.

I've been fascinated by Polymarket ever since it burst into mainstream consciousness during last year's US presidential election. While pollsters had the race on a knife edge, Polymarket traders were quietly putting millions on Trump, giving him a 58% chance whilst everyone else called it a coin flip. They were right, of course.

What strikes me about prediction markets isn't just their accuracy; it's how they've transformed from a Silicon Valley curiosity into something TIME magazine calls influential. Just last month, Polymarket finally returned to American shores after acquiring a regulated exchange for $112 million. They've even partnered with X as their official prediction market partner. So what does Polymarket think about a US recession? Let’s take a look.

CHART 1 • US recession probability on Polymarket

Well, it looks like wisdom of Polymarket crowds has done a complete 180 on America's economic prospects. Just three months ago, Polymarket traders were willing to bet 66 cents on the dollar that the US would slip into recession this year. Today? Those same contracts are trading for a measly 12 cents. That's an 82% collapse in recession fears, representing billions in lost bets for the doom merchants who bought at the peak.

Unlike polls or surveys, Polymarket traders actually put their cash where their predictions are, making this a particularly telling signal. The dramatic reversal coincides with surprising economic resilience despite aggressive tariffs that many thought would crater growth. JPMorgan has similarly cut its recession probability from 60% to 40%, while the New York Fed's model suggests just a 29% chance over the next year. Even with Trump's sweeping trade war creating uncertainty, GDP continues to expand and unemployment remains relatively contained. The crowd, it seems, has decided America's economy is more robust than the pessimists believed.

Source: Chartr

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