BETTING MARKETS Q1 US GDP FORECAST FLIPS NEGATIVE AMID TARIFF TURMOIL

The once-optimistic outlook for the US economy in the first quarter of 2025 is now shrouded in uncertainty, according to prediction markets.Platforms like Polymarket and Kalshi, where individuals can bet on the likelihood of future events, are signaling a potential economic contraction. Polymarket s US GDP growth wagers. Source: Polymarket Tariff turmoil. On April 2, Trump announced plans to place sweeping tariffs on US imports. The president has since paused the rollout of tariffs on certain countries, but the prospect of a global trade war still looms. The macroeconomic uncertainty has already weighed on US economic data.This bearish sentiment is largely attributed to the looming specter of tariff turmoil, fueled by announcements from former President Trump regarding sweeping tariffs on US imports.While some of these tariffs have been temporarily paused, the underlying macroeconomic uncertainty persists, casting a shadow over US economic data.This shift in expectations, from positive growth to a potential negative GDP print, highlights the sensitivity of the economy to trade policy and the ripple effects across financial markets. Key Takeaways. The US economy contracted at a rate of 0.3% in the first quarter of 2025. The slowdown in GDP growth was driven by a surge in imports, as US firms attempted to front-run tariffs.A US GDP contraction in Q1 2025 could signal increased recession risks and trigger volatility across equity, forex, and even cryptocurrency markets.Investors and analysts are now closely monitoring economic data as the situation unfolds, navigating the disruptions caused by tariff-related uncertainties and ongoing global trade tensions.

The Prediction Markets' Bearish Turn on US GDP

The shift in sentiment on Polymarket and Kalshi is significant. BTCUSD Bitcoin Betting markets Q1 US GDP forecast flips negative amid tariff turmoil. Bettors on prediction platforms Polymarket and Kalshi are flipping bearish on the US economy. As of AprilPreviously, forecasts were generally positive, anticipating continued growth.However, as of April 29, projections on both platforms have swung dramatically towards expecting negative economic growth for the first quarter of 2025.This change wasn't gradual; on Kalshi, consensus Q1 US growth estimates plummeted from approximately 0.5% to -0.4% in a mere 24 hours. On April 29, consensus Q1 US growth estimates on Kalshi, a US derivatives exchange, plunged from around 0.5% to -0.4% in less than 24 hours. Meanwhile, Polymarket bettors are setting the odds of a US economic contraction in Q1 at around 70%.Polymarket bettors are now placing the odds of a US economic contraction in Q1 at around 70%.

What makes these prediction markets so insightful? Bettors on prediction platforms Polymarket and Kalshi are flipping bearish on the US economy. As of April 29, both platforms are predicting that the US will log an economic contraction during the first quarter of 2025 in an upcoming economic data release. The US has logged positive growth figures every quarter since 2025, and aThey reflect the aggregated wisdom of a diverse group of individuals putting their money where their mouth is.Unlike traditional economic forecasts, which can be influenced by institutional biases or political considerations, these platforms offer a more direct and immediate assessment of market sentiment. Prediction markets Polymarket and Kalshi are forecasting that the US will report negative economic growth for the first quarter of 2025. Betting markets Q1 US GDP forecast flips negative amidThe rapid shift towards a negative outlook suggests a growing concern about the near-term health of the US economy.

Why the Sudden Change in Expectations?

Several factors likely contributed to this rapid shift in expectations:

• Tariff Announcements: The primary driver appears to be the announcements regarding potential tariffs on US imports. BTCUSD Bitcoin Betting markets Q1 US GDP forecast flips negative amid tariff turmoil Bettors on prediction platforms Polymarket and Kalshi are flipping bearish on the US economy. As of April 29, both platforms are predicting that the US will log an economic contraction during the firsThe uncertainty surrounding these tariffs, and their potential impact on businesses and consumers, has created a climate of economic anxiety.
• Upcoming Economic Data Release: The markets are closely watching the April 30 report from the US Bureau of Economic Analysis (BEA).This report will provide the first official measure of America's gross domestic product (GDP) for Q1 2025 and a clearer view into the impact of current trade policies.
• Anticipation of Import Surge: There's a widespread expectation that US firms may have front-loaded imports in Q1 2025, attempting to beat the tariffs before they come into effect. The economy contracted 0.3% in the 1st quarter as imports surged ahead of Trump's tariffs. But underlying data showed sturdy growth, despite GDP drop.This surge in imports could artificially depress GDP figures, as net exports are a component of GDP calculation.

The Impact of Tariff Turmoil on US Economic Growth

The prospect of widespread tariffs is creating considerable uncertainty for businesses.Factories are reportedly bracing for the impact of these policies, which could significantly raise production costs for manufacturers. Wave Count Analysis Reveals The XRP Price Trigger JIncreased costs often translate into higher prices for consumers, dampening demand and potentially leading to a slowdown in economic activity.

Furthermore, tariffs can disrupt global supply chains, making it more difficult for businesses to access the raw materials and components they need.This can lead to production delays, reduced output, and further economic contraction.The impact isn't limited to domestic industries; it can also affect foreign companies that rely on trade with the US.

However, it's important to consider that the full impact of the tariffs may not be immediately apparent. News Summary: Bettors on prediction platforms Polymarket and Kalshi are flipping bearish on the US economy. As of April 29, both platforms are predicting that the US will log an economic contraction during the first quarter of 2025 in an upcoming economic data release. The US has logged positive growth figures every quarter since 2025, and a reversal in that trend could mark the start of aThere could be a delayed effect as businesses adjust their strategies and supply chains to mitigate the impact. Q1 US GDP Forecast Turns Negative in Betting Markets Amid Ongoing Tariff Turmoil As of April 29, both platforms are projecting that the United States will experience an economic contraction in the first quarter of 2025, particularly in light of an upcoming data release that many are closely monitoring.Therefore, monitoring economic data closely over the coming months will be crucial.

The Role of Imports in Q1 GDP

A key factor to watch is the behavior of imports.If US firms did indeed accelerate imports in anticipation of tariffs, this could lead to a significant increase in imports during Q1 2025.Because GDP is calculated as:

GDP = Consumption + Investment + Government Spending + (Exports - Imports)

A surge in imports, without a corresponding increase in exports, would negatively impact the overall GDP figure. Bettors on Kalshi now expect a negative US GDP print. Source: Kalshi Related: Analysts brace for Bitcoin slide on gloomy US manufacturing data The markets are pegged to the outcome of an April 30 report by the US Bureau of Economic Analysis, which issues official measures of America s gross domestic product (GDP).This phenomenon could create a misleading picture of the underlying health of the economy, as the GDP decline might be a temporary effect of tariff anticipation, rather than a sign of fundamental weakness.

Analyzing the Underlying Economic Data

Even if the Q1 2025 GDP report comes in negative, it's crucial to analyze the underlying data carefully. The markets are pegged to the outcome of an April 30 report by the US Bureau of Economic Analysis, which issues official measures of America s gross domestic product (GDP). The report will provide the clearest view yet into the impact of US President Donald Trump s controversial trade policies.A single quarter of negative growth doesn't necessarily indicate a recession.Economists often look for a sustained period of economic contraction, typically two consecutive quarters of negative GDP growth, to officially declare a recession.

The BEA report will provide a detailed breakdown of the various components of GDP, including consumer spending, business investment, government spending, and net exports.Analyzing these components will help determine the true drivers of the potential GDP decline. On April 29, consensus Q1 US growth estimates on Kalshi, a US derivatives exchange, plunged from around 0.5% to -0.4% in less than 24 hours. Meanwhile, Polymarket bettors are setting the odds of a US economic contraction in Q1 at around 70%. On April 28, they still had a mostly favorable outlook.For example, if consumer spending and business investment remain strong, it would suggest that the economy is fundamentally sound, and the negative GDP print is primarily due to the tariff-related import surge.

Key Indicators to Monitor

In addition to the GDP report, several other economic indicators should be closely monitored:

• Inflation: Rising inflation could erode consumer purchasing power and dampen economic growth.
• Employment: A decline in employment would be a strong signal of economic weakness.
• Manufacturing Activity: Indicators like the Purchasing Managers' Index (PMI) can provide insights into the health of the manufacturing sector.
• Consumer Confidence: A decline in consumer confidence could lead to reduced spending and slower economic growth.
• Interest Rates: Changes in interest rates by the Federal Reserve can impact borrowing costs and economic activity.

The Broader Implications for Financial Markets

A US GDP contraction in Q1 2025 could have significant implications for financial markets, creating volatility and uncertainty across various asset classes.

• Equity Markets: Negative economic news often leads to a decline in stock prices. Bettors on prediction platforms Polymarket and Kalshi are flipping bearish on the US economy. As of April 29, both platforms Betting markets Q1 US GDP forecast flips negative amid tariff turmoil - Mount Rushmore CryptoInvestors may become more risk-averse and sell off their holdings, fearing a prolonged economic downturn.
• Forex Markets: A weaker US economy could lead to a decline in the value of the US dollar.Investors may seek safer havens, such as the Japanese yen or the Swiss franc.
• Cryptocurrency Markets: The impact on cryptocurrency markets is less clear.Some investors may view cryptocurrencies as a hedge against economic uncertainty, leading to increased demand.However, others may see them as a risky asset and sell off their holdings, contributing to volatility.
• Bond Markets: Bond yields typically fall during periods of economic weakness, as investors seek the safety of government bonds.

It's important to note that these are just potential scenarios.The actual impact on financial markets will depend on a variety of factors, including the severity of the economic contraction, the policy response from the government and the Federal Reserve, and the overall global economic outlook.

Navigating Economic Uncertainty: Strategies for Investors and Businesses

Given the current economic uncertainty, it's crucial for investors and businesses to adopt prudent strategies to protect their interests.

Strategies for Investors

1. Diversify your portfolio: Don't put all your eggs in one basket. The possibility of a US GDP contraction in Q1 2025 signals increased recession risks and may influence volatility across equity, forex, and cryptocurrency markets. Analysts emphasise monitoring economic data closely as the situation evolves amid tariff-related disruptions and global trade tensions.Diversify your investments across different asset classes, sectors, and geographies.
2. Consider defensive stocks: Defensive stocks, such as those in the consumer staples, healthcare, and utilities sectors, tend to be less volatile during economic downturns.
3. Review your risk tolerance: Make sure your investment portfolio aligns with your risk tolerance and time horizon.
4. Stay informed: Keep abreast of economic developments and market trends.
5. Consider professional advice: Consult with a qualified financial advisor to get personalized guidance.

Strategies for Businesses

• Review your supply chains: Identify potential vulnerabilities in your supply chains and develop contingency plans.
• Manage your costs: Look for ways to reduce costs and improve efficiency.
• Focus on customer retention: It's often easier and more cost-effective to retain existing customers than to acquire new ones.
• Explore new markets: Diversify your revenue streams by exploring new markets and customer segments.
• Stay flexible: Be prepared to adapt your business strategy as the economic situation evolves.

Q&A: Understanding the GDP Forecast Flip

What are prediction markets and why are they relevant?

Prediction markets, like Polymarket and Kalshi, are exchanges where people can buy and sell contracts that pay out based on the outcome of future events.They are relevant because they aggregate the wisdom of the crowd, providing a real-time assessment of market sentiment that can be more accurate and less biased than traditional forecasts.

Why is tariff turmoil affecting GDP forecasts?

Tariffs create uncertainty for businesses, potentially raising production costs, disrupting supply chains, and reducing demand.This uncertainty can lead to a slowdown in economic activity and negatively impact GDP growth.

What does a negative Q1 GDP forecast mean for the US economy?

A negative Q1 GDP forecast suggests that the US economy may have contracted during the first quarter of 2025.While not necessarily indicative of a recession, it signals increased economic weakness and the need for close monitoring of subsequent economic data.

What are the potential consequences of a negative GDP print?

Potential consequences include increased volatility in financial markets, a decline in stock prices, a weakening of the US dollar, and potentially a recession if followed by further economic contraction.

How can investors protect themselves during economic uncertainty?

Investors can protect themselves by diversifying their portfolios, considering defensive stocks, reviewing their risk tolerance, staying informed, and seeking professional advice.

Conclusion: Navigating the Uncertain Economic Landscape

The shift in betting markets' Q1 US GDP forecast to negative territory amidst ongoing tariff turmoil underscores the sensitivity of the economy to trade policy and global economic uncertainties.The change on platforms like Polymarket and Kalshi should serve as a wake-up call for investors and businesses to proactively manage risk and prepare for potential economic headwinds.While a single quarter of negative growth doesn't automatically signal a recession, it's a crucial warning sign that warrants close attention to underlying economic data and proactive planning. Bettors on Polymarket and Kalshi are wagering that the US will report negative economic growth during the first quarter of 2025. 2616 Total views 2 Total shares Listen to article News COINTELEGRAPH IN YOUR SOCIAL FEED Bettors on prediction platforms Polymarket and Kalshi are flipping bearish on the US economy. As of April 29, both [ ]The interplay between trade policy, global supply chains, and consumer behavior will continue to shape the economic landscape.By staying informed, diversifying investments, and adopting prudent business strategies, stakeholders can navigate these uncertain times and position themselves for long-term success. Bettors on prediction platforms Polymarket and Kalshi are flipping bearish on the US economy. As of April 29, both platforms are predicting that the US will log an economic contraction during the first quarter of 2025 in an upcoming economic data release. The US has logged positive growth figures every quarter since 2025, and a reversal in that trend could mark the start of a recession. TheMonitor key indicators, analyze market trends, and, if needed, consult with financial professionals to make informed decisions.Remember that adaptability and a proactive approach are essential for weathering any economic storm.