US Economy’s Plot Twist: Betting Markets Now Foresee Gloomy Q1 GDP, Blame Tariffs & Canada

by

In the soft twilight of April’s end, the soothsayers of Polymarket and Kalshi – modern Oracles with a dash more caffeine and less incense – gazed into the economic abyss. The sight was grim: as of the 29th, whispers from both echo chambers suggest the United States, with all its optimism, might astonish by shrinking its economic waistline in the first quarter of 2025.

Picture it – the past two years’ steady growth, like the reliable seasonal greening of poplar trees, suddenly brought short. Should this contraction arrive, the word recession, that dreary cousin no one wants at dinner, may soon be scribbling RSVP cards to the nation.

Signs of thinning hope were never clearer. Once, prediction markets confidently hummed tunes of steady progress. But on the 29th, even Kalshi, that staid marketplace, toppled from mild optimism at 0.5% growth to a hangdog -0.4%, all in a single day. A swing more abrupt than a Russian novel’s plot twist, and equally dramatic.

Polymarket’s punters, not to be out-wagered, have staked odds at a 70% likelihood of contraction. These are the same optimists who, a day prior, believed in happy endings. How fickle is fate—and how much like a roulette wheel are the fortunes of empires! 🎲

All this, it seems, cannot be blamed on American hands alone. The day before, our polite northern neighbours (oh, Canada!) voted in Liberal Mark Carney. He swept into power swearing to out-hawk the Americans at their own game, dusting off trade disputes like an old Pushkin feud. The markets shivered accordingly.

Now all eyes, and a few anxious wallets, turn to the April 30 revelation from the Bureau of Economic Analysis—a title almost as long as its reports, but with considerably fewer jokes. This is where we discover just how much mischief President Trump’s tariffs have sown.

Prediction markets, bless their feverish calculations, let users wager on these events much as one might speculate on the outcome of a family argument over who finished the last pryanik. In 2024, these contracts were nearly as dexterous as polling in predicting Trump’s disputed triumph (one can almost hear the victorious sighs, and their neighbors’ groans).

Tariff turmoil

Not to be upstaged, on April 2, President Trump announced a grand choreography of tariffs. It seemed no import would escape the dance. Some countries received a brief respite, but the lingering possibility of a globe-spanning trade war remains the boogeyman beneath every economic analyst’s bed. 🛌👻

Unsurprisingly, US economic data is already sporting new worry lines. The Philadelphia Fed’s April survey, that monthly squall of complaints and production numbers from the heartland’s manufacturers, showed its deepest frown since 2020. Factories brace themselves for the coming storm—if the tariffs land, production costs may rise higher than a proprietor’s eyebrows on tax day.

So, as the world waits for April’s report, bruised factories, anxious speculators, and Mark Carney’s bespectacled gaze all peer into the hazy dawn of America’s economic tomorrow. Truly, reality has authored another chapter worthy of a Russian novel—though perhaps with better odds, and a little more vodka. 🍸📉

Read More

2025-04-30 02:11