Bettors on prediction platforms Polymarket and Kalshi have turned bearish on the US economy, forecasting negative economic growth for the first quarter of 2025. This shift comes as the US has seen positive growth in every quarter since 2022, and a negative report could signal the onset of a recession. On April 29, growth estimates on Kalshi dropped sharply from around 0.5% to -0.4%, while Polymarket bettors assigned a 70% probability to a contraction. The pessimistic sentiment follows Canada's election of Liberal Prime Minister Mark Carney, who has promised a tougher stance in the ongoing trade tensions with the US. These developments coincide with President Trump's newly announced sweeping tariffs, heightening macroeconomic uncertainty and affecting US manufacturing data negatively. The upcoming April 30 report from the US Bureau of Economic Analysis is expected to clarify the current economic impact of Trump's trade policies, as prediction markets have shown reliability in their forecasts in previous elections.

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