According to The Kobeissi Letter, a recession could align with several of President Trump's economic objectives, such as reducing US inflation, lowering treasury yields, cutting the trade deficit through tariffs, prompting Federal Reserve interest rate cuts, and decreasing oil prices (source: The Kobeissi Letter, May 21, 2025). These macroeconomic shifts typically drive risk-off sentiment in traditional markets, often leading to increased volatility in cryptocurrency markets as investors seek alternative assets. Crypto traders should monitor US economic data closely, as recession signals and Fed policy shifts can trigger significant price movements in Bitcoin and altcoins, especially with rising demand for decentralized stores of value during periods of economic uncertainty.

According to Edward Dowd, referencing data from the US Economy Report by phinancetechnologies.com, recent economic indicators suggest a significant risk of a deep worldwide recession in 2025. This narrative, as illustrated in Dowd's shared chart, points to declining growth and increasing economic stress, which have historically led to heightened volatility in both traditional and crypto markets. Crypto traders should monitor macroeconomic signals closely since global recession fears typically drive sharp movements in Bitcoin, Ethereum, and altcoin prices as investors seek alternative assets or liquidate positions for liquidity (Source: DowdEdward on Twitter, May 21, 2025; phinancetechnologies.com).

According to The Kobeissi Letter, Japan's economy contracted by -0.7% in Q1 2025, marking the first decline in a year and more than doubling economists' expectations (source: The Kobeissi Letter, May 16, 2025). This GDP data does not factor in the reciprocal tariffs imposed on April 2, suggesting further downside risk. Traders should monitor heightened volatility in the Japanese yen and Nikkei index, as recession fears could spill over into the global cryptocurrency market, particularly impacting Bitcoin and stablecoin trading pairs due to risk-off sentiment and capital flows (source: The Kobeissi Letter).

According to Edward Dowd, there are expectations for a recession in 2025, but he questions the timing and accuracy of current economic models. Dowd notes that when adjusting for large gold imports, the GDP reflects a -1.5% rate. He also points out that these models have shown spotty accuracy since the Covid pandemic, suggesting potential political influences in these economic forecasts.