Data from the betting platform Kalshi shows that the likelihood of a recession in 2025 has risen to 62%, a significant increase from 17% earlier this year. The surge in recession probabilities is mainly attributed to the economic strain caused by new tariffs aimed at reducing trade deficits, sparking concerns of a potential trade war, particularly with China and the European Union. The reaction in the markets has been strong, with U.S. stock indices experiencing significant losses on April 4, including a 5.5% drop in the Dow, a 6% fall in the S&P 500, and a 5.8% decline in the Nasdaq. Major financial institutions like JPMorgan and Moody's Analytics are also warning of a potential recession in 2025, with concerns about rising inflation, slower economic growth, and increased unemployment due to the impact of tariffs. Federal Reserve Chair Jerome Powell and other experts are expressing worries about the tariffs leading to slower growth and higher inflation, while trade tensions are contributing to global economic uncertainty. Economic analysts are cautious about the ongoing trade policies potentially worsening economic challenges.