Fresh concerns of a looming U.S. recession emerged this week as President Donald Trump’s aggressive tariff rollout sent shockwaves through prediction markets and global assets.

On decentralized prediction platform Polymarket, traders pushed the probability of a 2025 U.S. recession above 50% for the first time, up from 39% in just 24 hours. Regulated exchange Kalshi showed a similar jump, with recession odds climbing to 54%.

The shift follows Wednesday’s unveiling of sweeping new import duties: a base 10% tariff on all foreign goods, plus elevated rates on 60 targeted nations. China faces the heaviest blow, with a combined 54% levy, while Indian and European exports were also hit.

The policy move sent risk markets reeling. U.S. stock futures dropped 3%, gold surged to new highs, and bitcoin (BTC) slumped 1.5% to $83,100 as risk sentiment turned sharply negative.

Analysts warn that the tariffs could reignite inflation and dampen business confidence. “This move risks dragging down global trade and tipping the U.S. into a downturn,” said Rachel Lin, a macro economist at Capital Axis.

Despite recession concerns, some observers argue the Fed may pivot dovishly. “Tariffs can slow growth, which ironically strengthens the case for interest rate cuts,” noted Fed watcher Joseph Wang, referencing expectations that the central bank may ease policy as early as June.

According to UBS, while downside risks have grown, a full recession may still be avoided. The bank forecasts 2% U.S. growth in 2025, assuming targeted tariffs and mild retaliatory measures.

For crypto investors, the situation remains precarious. Bitcoin and ether saw increased volatility, while liquidations in leveraged trades spiked amid the uncertainty. Recession fears, combined with the potential for Fed rate cuts, could continue to shape digital asset markets in the weeks ahead.