The risk of a US recession soars: predicted market probability rises to 40%, with soaring oil prices and worsening employment becoming key factors

March 9 News: As global energy prices rise and geopolitical tensions intensify, concerns about the U.S. economy are significantly increasing. Recent data from multiple forecasting platforms show that investors’ expectations of a recession in the United States by 2026 are rapidly rising, drawing widespread attention in financial markets.

Currently, on the prediction platform Polymarket, traders estimate the probability of the U.S. entering a recession by the end of 2026 at about 40%. Another prediction platform, Kalshi, shows a market recession probability of approximately 36%, a notable increase from previous levels. These markets typically define a recession as two consecutive quarters of negative GDP growth or an official declaration by the National Bureau of Economic Research (NBER).

One key factor behind the re-pricing of market risks is the sharp volatility in the energy sector. Recently, tensions in the Middle East have persisted, with ongoing conflicts between the U.S., Israel, and Iran, disrupting global energy supply chains. International oil prices have thus surged past $100 per barrel for the first time since 2022. Economist Peter Schiff pointed out that a rapid rise in oil prices often puts pressure on economic growth and could serve as a significant trigger for a recession.

Meanwhile, the U.S. labor market is also signaling weakness. According to data released by the U.S. Bureau of Labor Statistics, non-farm employment in the U.S. decreased by about 92,000 in February 2026, with the unemployment rate rising to 4.4%. Over the past five months, U.S. employment has declined three times, which is seen as an important sign of weakening economic momentum.

Macro analyst Henrik Zeberg, using a business cycle model, observed that its coincident indicator (COI) has issued a “recession imminent” signal. Historically, after such signals, recessions typically begin within 1 to 3 months, while the NBER usually confirms a recession 9 to 12 months later.

Additionally, financial market stress is increasing. Some private credit institutions have started restricting fund redemptions. For example, BlackRock has imposed redemption limits on its approximately $26 billion private credit fund, and Blue Owl Capital’s fund OBDC II has paused quarterly redemptions and is gradually distributing cash through asset sales.

Amid rising risk sentiment, demand for hedging has noticeably increased. Data shows that the put options volume on several U.S. credit ETFs has risen to about 11.5 million, and the put skew on the S&P 500 short-term options has reached its highest level since the 2022 bear market. Analysts believe that the combined impact of energy price shocks, weakening employment, and financial system pressures is fueling expectations of a U.S. recession.