US China Trade Deal: Odds of U.S. Recession Falls to 40%, Is A Crypto Rally Ahead?

Earlier today, US China agreed to ease tariffs for another 90 days. Current prediction market data show that the likelihood of the US entering a recession in 2025 has dropped to its lowest level in months. Compared to the 69.7% odds registered on the Kalshi marketplace earlier this month, these odds have now fallen to 40%.

Is US Recession Averted With US China Tariff Pause?

In a recent post on X, market commentator The Kobeissi Letter highlighted Kalshi’s data on the odds of the U.S. entering a recession in 2025. With the US-China trade deal, the odds have fallen to 40%. 

As CoinGape reported, the US China tariff tensions have eased as both sides agreed on a 90-day tariff easing plan. As part of the deal, the US will reduce tariffs on Chinese goods from 145% to 30%, while China will lower its tariffs on American products from 125% to just 10%.

It is important to note that this update came during high-level talks in Geneva, where the U.S. Treasury Secretary Scott Bessent led the U.S. delegation. Chinese Vice Premier He Lifeng represented Beijing.

Bessent confirmed that both nations no longer seek economic decoupling and instead focus on building a balanced trading relationship. He noted that the previous tariffs had effectively functioned as an embargo, damaging trade on both sides. The US-China trade deal marks a key shift away from that hardline stance.

Shortly after the news broke, Kalshi data showed the probability of a 2025 US recession had dropped by nearly 2% points to 43%. Earlier in the year, the data pegged the odds of a recession at 71%, reflecting deep concerns over inflation, supply chain disruptions, and global uncertainty. 

Top economist Mark Zandi echoes this concern at Moody’s. Zandi warned of a potential US recession that contributed to a fall in major crypto prices earlier in the month.

Crypto Market Reacts to US China Trade Deal

The financial markets responded with noticeable optimism. The Dow Jones and Nasdaq posted modest gains, while BTC price  jumped past $105,000. At the time of writing, the top coin was changing hands for $102,894 atop a mild 1.03% slipoff.

The bullish momentum is still sustained with the coin’s Relative Strength Index (RSI) pegged at 64 and price trading above the 50-SMA. The market outlook has generally fueled fresh optimism around trade and global economic stability. As trade tensions ease, institutional and retail investors appear more willing to take risks. 

With global sentiment improving, attention now turns to how this momentum will shape upcoming policy meetings and whether more countries will pursue similar trade relief efforts.

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