Economists and Markets Agree: Recession Risks Are Rising

The odds of a U.S. recession in 2025 are climbing, and it’s not just economists sounding the alarm. Betting markets now put the chance of a downturn at 32%, up from 23% last month. The stock market is flashing warning signs too, with the Russell 2000 index dropping 16%—historically a key predictor of economic slowdowns.

Consumer confidence is slipping as rising costs and economic uncertainty make people think twice about major purchases. Vacations are being canceled, spending is tightening, and the mood is shifting. If history is any guide, these are the early tremors before a full-blown economic shakeup.

The real question is whether policymakers will recognize the warning signs or continue making short-term decisions that push the economy over the edge. Because if corporate layoffs start piling up and consumer spending collapses, there won’t be much debate left about whether a recession is coming—it will already be here.