The Wall Street Journal’s latest economic forecasting survey just delivered the macro equivalent of a mixed report card. The good news: economists think the US is far less likely to tumble into a recession than they did three months ago. The not-so-good news: inflation is sticking around like a houseguest who keeps finding reasons not to leave.
The quarterly survey, conducted July 3-8 with 69 economists participating, pegged the average recession probability over the next 12 months at 33%. That’s a meaningful drop from the 45% reading in April, and a sharp retreat from earlier 2025 peaks that ranged as high as 45-60% when tariff anxieties were running hot.
The numbers behind the mood shift
Beyond the headline recession figure, economists broadly upgraded their outlook across several key metrics. Near-term GDP growth forecasts moved higher. Projections for job creation strengthened. And inflation estimates, while still elevated, were actually revised downward relative to the prior survey.
The driver behind this more optimistic stance? Tariff-related price pressures turned out milder than feared. Earlier in 2025, economists were bracing for trade policy to deliver a meaningful hit to both prices and growth. The reality has been less dramatic, at least so far.
For context, the WSJ Economic Forecasting Survey has tracked economists’ views on US economic performance for over 40 years. It polls participants on GDP, CPI inflation, unemployment, and recession odds on a quarterly cadence, typically in January, April, July, and October.
What this means for crypto and risk assets
The inflation piece is where it gets interesting for digital asset investors. Economists in the WSJ survey raised near-term growth forecasts while simultaneously acknowledging that inflation will remain elevated longer than previously hoped. That combination, stronger growth with sticky prices, creates a complicated puzzle for the Federal Reserve.
If inflation persists above the Fed’s comfort zone, rate cuts get pushed further out. And if rate cuts get delayed, the liquidity tailwind that crypto bulls have been counting on takes longer to materialize.
The bigger picture for investors
The US economy has shown more resilience than expected, which supports corporate earnings and consumer spending. But that resilience comes with a cost: persistent inflation that limits how aggressively central banks can ease policy.
The 33% recession probability also has implications for stablecoin demand and DeFi yields. A stronger economy typically means more productive uses for capital outside of crypto, which can compress DeFi yields as the opportunity cost of parking money on-chain increases. Conversely, higher-for-longer inflation could sustain demand for yield-bearing stablecoins and tokenized treasuries that offer returns competitive with traditional fixed income.