Trump’s Tariff Tango: Will 2025 Be the Year of Recession Roulette?

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It is a truth universally acknowledged that a trader in possession of a prediction must be in want of a recession. Thus, the esteemed participants of the Kalshi prediction market have declared, with no small degree of certainty, that the odds of a US recession in 2025 stand at a rather alarming 61%. This proclamation follows the rather theatrical tariff order signed by President Donald Trump on the second of April, a move that has left the markets in a state of delightful disarray. 🎭

Kalshi, ever the arbiter of economic propriety, employs the most respectable criteria for such a declaration: two consecutive quarters of negative gross domestic product (GDP) growth, as dutifully reported by the United States Department of Commerce. One must admire their commitment to tradition, even in the face of such modern chaos. 📉

Since the twentieth of March, the odds of a recession on this most distinguished platform have nearly doubled, a fact that mirrors the equally dire predictions on Polymarket, where traders have placed the odds at a similarly grim 60%. It seems the macroeconomic outlook for 2025 has taken a rather precipitous turn, thanks to President Trump’s sweeping tariff order and the ensuing sell-off in capital markets. One might say the markets are behaving like a particularly dramatic heroine in a novel of ill-fated romance. 💔

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The President’s executive order, which established a 10% baseline tariff rate for all countries and various “reciprocal” rates for trading partners, has thrown the markets into a state of utter confusion. The immediate stock market sell-off wiped away over $5 trillion in shareholder value in a matter of days, a sum so vast it could fund a thousand balls at Pemberley. 💸

Market analysts, ever the harbingers of doom, warn of a potentially protracted trade war that could negatively impact global markets and suppress risk asset prices, including cryptocurrencies. Meanwhile, President Trump remains steadfast in his belief that the tariffs will strengthen the US economy in the long term, correcting any trade imbalances with the finesse of a master matchmaker. 💼

“The markets are going to boom,” the President declared on the third of April, dismissing the current sell-off as a mere hiccup in the grand scheme of things. One cannot help but admire his optimism, even if it is as misplaced as Mr. Collins’s confidence in his own charm. 🌟

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Asset manager Anthony Pompliano, ever the provocateur, has speculated that President Trump deliberately crashed the markets to bring down interest rates. Pompliano cites the reduction in 10-year US Treasury bonds as evidence of this cunning strategy, which has seen interest rates decline from approximately 4.66% in January 2025 to just 4.00% on the fifth of April. One might say the President is playing a game of economic chess, though whether he is a grandmaster or a novice remains to be seen. ♟️

President Trump has also taken to pressuring Federal Reserve chairman Jerome Powell to lower short-term interest rates, a move he believes would be most opportune. “This would be a perfect time for Fed chairman Jerome Powell to cut interest rates,” he wrote in an April 4 Truth Social post. One can only imagine the sigh of resignation that must have escaped Mr. Powell upon reading such a missive. 📜

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2025-04-06 00:54