US recession by end of 2026?
Prediction markets currently give a 23% probability that US recession by end of 2026?. This contract trades at 23¢ on Polymarket, closing January 31, 2027. The recession probability has collapsed 58% over the past week (from 41¢ to 26¢), suggesting a significant shift in market sentiment following recent economic data or Fed communications.
Analysis
The recession probability has collapsed 58% over the past week (from 41¢ to 26¢), suggesting a significant shift in market sentiment following recent economic data or Fed communications. The 359.6% implied yield on the "Yes" side reflects substantial tail risk premium, though the tight 1¢ spread and $85.8M open interest indicate healthy liquidity for a binary event with 289 days to expiration. The neutral regime score and moderate Cliff Risk Index of 3 suggest the market is pricing in genuine uncertainty rather than extreme conviction, despite the sharp recent repricing favoring the "No" outcome.
Resolution rules
This market will resolve to “Yes” if either of the following conditions is met: 1. The seasonally adjusted annualized percent change in quarterly U.S. real GDP from the previous quarter is less than 0.0 for two consecutive quarters between Q2 2025 and Q4 2026 (inclusive), as reported by the Bureau of Economic Analysis (BEA). 2. The National Bureau of Economic Research (NBER) publicly announces that a recession has occurred in the United States, at any point during 2025 or 2026, with the announcement made by the time the BEA releases the advance estimate for Q4 2026. Otherwise, this market will resolve to "No". Note that advance estimates will be considered. For example, if upon release, the advance estimate for Q3 2025 was negative, and the Q2 2025's most recent, up-to-date estimate was also negative, this market would resolve to "Yes". If on December 31, 2026 the latest estimate for quarterly GDP in Q3 2025 was negative, this market will stay open until the Advance estimate of Q4 2026 is published, at which point it will resolve to "Yes" if Q4 2026 was negative or if the NBER declares a recession by then. The resolution source will be the official announcements from the NBER and the BEA’s estimate of seasonally adjusted annualized percent change in quarterly US real GDP from previous quarters as released by the Bureau of Economic Analysis (BEA), https://www.bea.gov/data/gdp/gross-domestic-product
Indicators
Regime
Edges (1)
Trade
sf trade 0xfdc73f10edf0266756686f35b5712cffa828b0940fc015e0426c76c934c2105d yes 100