Polymarket data shows U.S. recession probability plunging to 22% from April’s peak of 66%, primarily due to cooling trade tensions and strong economic indicators. Negotiations between the U.S. and major trading partners have progressed, reducing fears of protracted trade wars that previously threatened economic stability. Simultaneously, resilient consumer spending and robust job growth have alleviated concerns about near-term economic contraction.
The Nasdaq’s outperformance against global indices further signals renewed confidence in U.S. economic exceptionalism. This optimism stems from cooling inflation, steady corporate earnings, and the Federal Reserve’s measured approach to interest rates. Market participants now view the U.S. as better positioned to avoid recession than other major economies facing structural challenges.
Bitcoin has benefited from this shift, with its price correlation to U.S. equities strengthening as recession fears fade. The lowered probability reflects broader market sentiment that the U.S. economy can achieve a ‘soft landing,’ though risks remain from geopolitical uncertainties or unexpected inflation spikes. This trend highlights how macroeconomic perceptions directly influence crypto market dynamics.
