Recession Dodged? Trump’s Shock Move Changes Everything

The surprising decision of American President Donald Trump to temporarily suspend reciprocal tariffs quickly reassured markets and reduced the prospects of an economic recession.

Trump eases pressure and recession fears drop

On Wednesday, April 9, 2025, Donald Trump announced a 90-day pause on tariffs of at least 10% on most U.S. imports, notably excluding China. This decision had an immediate impact on economic forecasts.

Prediction markets quickly adjusted their estimates. The Myriad Markets platform reduced the probability of a U.S. recession by the end of 2025 to 46%, while Polymarket and Kalshi assessed it at 48% and 55% respectively.

These forecasts represent an impressive drop of 15% to 25% from previous estimates.

Goldman Sachs even canceled its forecast for an economic recession in the United States before the end of 2025, a sign that major financial institutions view this measure as significant for U.S. economic stability.

A spectacular rebound in financial markets

The presidential announcement triggered a spectacular rise in financial markets. The Nasdaq 100 and S&P 500 nearly touched a 10% intraday peak, significantly erasing losses from the previous week caused by the initial announcement of an aggressive tariff regime.

The crypto market was no exception. Bitcoin surged by 4.6% in less than an hour, reaching $81,300, while Ethereum and XRP also saw significant increases.

President Trump had indeed anticipated this positive market reaction by posting on Truth Social a few hours before the official announcement: “IT’S THE PERFECT TIME TO BUY!!!”

However, some experts, like Justin Wolfers, an economics professor at the University of Michigan, urge caution. According to him, the recession risks remain “very high” because “the president has already caused a lot of damage and is only offering a partial solution.”

This pause in the trade war nevertheless provides a welcome respite for the U.S. economy and global markets, even though uncertainty persists regarding future trade relations, particularly with China.