U.S. recession odds: 2026

Growth has slowed but stayed positive, and the Fed is now raising rates. Here's what the data says, how 2026 recession contracts resolve, and how to trade them on Kalshi and Polymarket.

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Where things stand at the end of September

The economy slowed in the spring but didn't shrink: BEA's second estimate put second-quarter growth at a 1.5% annual rate, after 2.1% in the first quarter. The third estimate for Q2 comes out September 30. On September 16 the Fed raised rates by a quarter point to 3.75%–4.00%, pointing to elevated inflation rather than a weakening economy.

For a YES payout on a 2026 contract, a recession has to begin this year and later be dated there by NBER. With three months left, fewer possible start months remain, so the price tends to drift down even when the data doesn't change. If you're comparing today's price with one from the spring, most of the gap is time, not a new view of the economy.

How resolution works

Kalshi's recession contract pays $1 if the NBER Business Cycle Dating Committee declares a recession with a start date in 2026. Otherwise $0. Polymarket variants may use NBER or a stricter two-consecutive-quarters-of-negative-GDP rule. Always check the resolution source in the market description.

Pair trades worth knowing

• Long recession + long bonds: classic risk-off pairing.
• Long recession + long Fed cut contracts: cuts and recessions tend to co-move.
• Short recession + long equity index: a leveraged bull stance.

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Sources

• › BEA — GDP, second estimate, Q2 2026 (opens in a new tab)
• › NBER — Business Cycle Dating Committee (opens in a new tab)
• › BLS — Employment Situation releases (opens in a new tab)
• › Kalshi — economics markets (opens in a new tab)

Frequently asked questions

Is the U.S. in a recession in 2026?

No recession has been declared. BEA estimates real GDP grew at a 2.1% annual rate in the first quarter of 2026 and 1.5% in the second quarter.

How is recession defined for these markets?

Kalshi's 2026 recession contract uses the NBER Business Cycle Dating Committee's official declaration. Polymarket variants may use NBER or a two-consecutive-quarter GDP rule, so read each market's resolution criteria.

When do recession contracts settle?

After NBER officially dates a recession, or when the market's deadline passes without one. NBER announcements often come months after a recession starts, so settlement can lag.

Can I trade recession contracts in the U.S.?

Yes. Kalshi is CFTC-regulated and trades in US dollars; Polymarket US is available to eligible users through its app, including in Florida.

What data moves recession contracts the most?

Monthly payrolls and the unemployment rate, quarterly GDP estimates and revisions, and Fed decisions. The next GDP release is the Q2 third estimate on September 30, 2026.