The Mainstream Media Reverses Course on a Recession

Several banks called for a recession in 2025 as recently as last week, following a surprise negative read in GDP.

But with a China trade deal in place, many of those big Wall Street banks are reversing course. This morning, JPMorgan noted that it did not see a recession anymore.

That’s also reflected in the betting markets. Polymarket showed as much as a 66% chance of a recession in 2025 – as recently as the start of the month.

Today, the odds are now down to around 40% – and should fall further as more trade deals are announced.

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As Andrew notes:

Most mainstream analysts will take a current trend and extrapolate its continuation out forever. That’s lazy, first-level thinking. A better approach is to think in terms of probabilities and what can change them. Tariff and trade news can – and now has – changed on a dime.

We’re still skeptical about this current market rally, even as many factors have turned bullish.

Why? One reason is simple – we won’t rule out a recession as government spending shrinks.

Given that the government spends more than it brings in, about 6% of GDP, a government recession wouldn’t be a bad idea — just a painful, but necessary correction.

That’s the line of thinking behind some of our upcoming research, where we look at President Trump’s three-step plan to reform the economy on sturdier ground. If it comes to pass, it could be an incredibly positive Grey Swan event. We’ll have further details on that research later this month.

-Addison

Several banks called for a recession in 2025 as recently as last week, following a surprise negative read in GDP.

But with a China trade deal in place, many of those big Wall Street banks are reversing course. This morning, JPMorgan noted that it did not see a recession anymore.

That’s also reflected in the betting markets. Polymarket showed as much as a 66% chance of a recession in 2025 – as recently as the start of the month.

Today, the odds are now down to around 40% – and should fall further as more trade deals are announced.

Turn Your Images On

As Andrew notes:

Most mainstream analysts will take a current trend and extrapolate its continuation out forever. That’s lazy, first-level thinking. A better approach is to think in terms of probabilities and what can change them. Tariff and trade news can – and now has – changed on a dime.

We’re still skeptical about this current market rally, even as many factors have turned bullish.

Why? One reason is simple – we won’t rule out a recession as government spending shrinks.

Given that the government spends more than it brings in, about 6% of GDP, a government recession wouldn’t be a bad idea — just a painful, but necessary correction.

-Addison

Progressives learned long ago that you don’t have to win an argument if you can simply redefine the words.

Regardless of what’s happening in stocks, the same long bond can be a good buy for a retiree and an expensive obligation for everyone else.

The same uncertainty driving investors out of speculative assets is sending them toward dollars and Treasury securities.

Behind the drama unfolding at Nvidia, Big Tech is borrowing to keep the AI buildout chugging along just as the Treasury needs trillions.

Progressives learned long ago that you don’t have to win an argument if you can simply redefine the words.

Regardless of what’s happening in stocks, the same long bond can be a good buy for a retiree and an expensive obligation for everyone else.

The same uncertainty driving investors out of speculative assets is sending them toward dollars and Treasury securities.

Behind the drama unfolding at Nvidia, Big Tech is borrowing to keep the AI buildout chugging along just as the Treasury needs trillions.