Mixed US economic data can drive speculation that the Federal Reserve can adopt a more stubborn stance on interest rates, and may support Bitcoin and other dangerous assets, market analysts say.
Today, key US metrics today paint pictures of stagnant growth and sustained inflationary pressures, increasing uncertainty in financial markets. The latest ADP report showed that private sector job creation would be significantly slower in April. Only 62,000 new jobs were added, well below 108,000 expectations and well below 147,000 in March.
At the same time, the US first quarter GDP unexpectedly shrank by 0.3%, marking its first negative quarter growth since 2022. Economists had predicted a modest 0.2% expansion. Meanwhile, inflation data from the Federal Reserve's priority indicator, Personal Consumption Expense (PCE), presented a variety of situations. PCE rose 2.3% per year in March, slightly above 2.2% expectations, but Core PCE, which excludes food and energy prices, was 2.6% per year, down from its revised February 3.0%, in line with expectations.
The combination of slow growth and stable inflation has revived the story of the stag and led to speculation that the Fed could be forced to ease monetary policy earlier than expected.
“Fed futures reflect the increasing possibilities of a 4+ rate cut this year as the Fed navigates clear indications of lower inflation and slowing the economy,” said David Hernandez, a 21-share crypto investment expert. “This delicate balancing act will be at the heart of market dynamics in the coming weeks.”
Bitcoin fell 1% that day, shortly after economic data was released, falling below $94,000. However, some analysts say low interest rates and soft US dollars could pave the way for new rally in the cryptocurrency market.
Dr. Kiril Kretov, senior automation expert at CoinPanel, said:
Kretov also said President Donald Trump's increased pressure on the Fed to cut interest rates, combined with tariff concerns and easing liquidity in the crypto market, could amplify the impact of Dub's policy changes.
“If we take into account the surprising -0.3% GDP print, a disruption shift is even more likely,” Krethov said. “Even a modest influx can result in significantly higher BTC. This market is poised upside down, but is also very sensitive to macro changes.”
*This is not investment advice.
