On Thursday, the U.S. economy reported a 1.1% growth in the first quarter, lower than the consensus forecast of 2.2%. This news has caused the bitcoin and ethereum rates to remain steady while other major U.S. equites saw a positive reaction. The 10y1m yield curve became uninverted, a recession indicator, which bolstered positive news, while Amazon's stock was up 3%.

Another factor to consider is how the dollar index has dropped by 12% since October 2022 and its correlation to the bitcoin rate. When the Federal Reserve announced further interest rate hikes in August, the dollar index increased, while Bitcoin decreased by 11%. This connection implies that a further reduction in the US dollar thanks to the GDP results may resulted in an increase for the Bitcoin rate.

The US Federal Reserve in May will evaluate the effectiveness of their interest rate rise on the economy for the Personal Consumption Expenditure Index. The central bank is expected to pronounce its next rate increase on May 3. Markedly, Jerome Powell suggested two further 25 basis point hikes when impersonated by pranksters from Ukraine. He also expressed that a recession is as likely as slow economic growth and admits that it can be painful task to lower the inflation rate but doesn't know of any painless way to do so. The CME FedWatch Tool assigns a 87.4% probability of an upcoming rate hike.

In conclusion, the US first quarter GDP results caused the Bitcoin and Ethereum rates to remain flat. While US equities responded positively, the 10y1m yield curve became uninverted and Amazon's stock was up 3%. Other factors such as the US dollar index, the Personal Consumption Expenditure Index, and an expected rate increase in May all effect the Bitcoin rate. With all the information and predictions, it is hard to determine which direction the Bitcoin rate will go but it will be interesting to see if it will be effected by the US economic news.



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