Trump's Tariffs Spark 60% US Recession Odds, Crypto Market Resilient

Donald Trump’s tariffs have significantly impacted global markets, with experts predicting a US recession this year. JPMorgan’s chief economist, Bruce Kasman, has raised the odds of a US recession to 60% following Trump’s tariffs announcement. Deutsche Bank has also increased the probability of a recession to 50%. Prior to Trump’s announcement, Goldman Sachs had raised the odds of a recession from 20% to 35%. Market commentator The Kobeissi Latter stated that a recession is inevitable if these tariffs persist. Traders are also betting on a downturn this year, with odds on the prediction platform Kalshi surging to 61%.

A US recession would have a profound impact on global markets. The stock market has already entered bear market territory following Trump’s announcement of tariffs on almost all countries on April 2. A recession would exacerbate the downturn in the stock market and other markets. However, the crypto market, led by Bitcoin, has shown resilience. A CoinGape market analysis noted that Bitcoin has decoupled from stocks, with the flagship crypto down only 5.51% while the S&P 500 has crashed 12% over three days. This suggests that market investors see BTC as a flight to safety amid the market downturn, which is bullish for the crypto market, especially if a US recession occurs. BlackRock CEO Larry Fink had previously praised Bitcoin as an “uncorrelated asset” that provides a hedge against market turmoil.

Amid talk of a US recession following Trump’s tariffs announcement, Dom Kwok, an expert and co-founder of EasyA, has affirmed that recessions are bullish for crypto prices. He explained that the US Federal Reserve lowers interest rates during recessions to spur the economy. This leads to quantitative easing (QE), which is bullish for the crypto market, and more liquidity flows into the market during this period. Dom added that all this would lead to crypto and risk asset prices rising. He also alluded to how the Bitcoin price surged during the 2020 COVID recession. As such, the crypto market is likely to soar again if a recession occurs. Analyst Kevin Capital also echoed a similar sentiment following China’s response to Trump’s tariffs. The analyst stated that the crypto market was more focused on the Fed’s monetary policies rather than tariffs. This indicates that a market boom would happen even in the face of a recession, since the US Central Bank would likely step in to help stimulate the economy.