Analysts evaluated the impact of the easing US Inflation data on the FED's Interest rate cut probability and Bitcoin! Here are the details.

Weaker-than-expected U.S. economic performance and easing inflation data revived hopes for a more dovish FED, and analysts predicted that Bitcoin’s (BTC) could provide more benefits than stocks in the coming months.

Analysts Say That the Contraction in US GDP and the Decline in Inflation Have Increased Hopes for Fed Rate Cuts

The US economy contracted for the first time in three years, and the Core Personal Consumption Expenditures, which is the inflation indicator preferred by the Fed, remained flat last month. The Core PCE decreased from 3.0% to 2.6% on an annual basis, reinforcing the narrative that inflation is gradually moving towards the central bank’s 2% target.

Bitcoin is Leading the Recovery

After the data was released, Bitcoin surpassed $97,000, gaining more than 13% since the symbolic term “D-Day” which refers to a renewed rally among crypto investors.

In contrast, the S&P 500 recorded a gain of less than 1% in the last 30 days, highlighting the growing divergence between digital assets and traditional stock markets.

BRN chief research analyst Valentin Fournier stated in the market update dated May 2, “As inflation trends toward the Fed’s 2% target, expectations for multiple interest rate cuts are strengthening. This situation could lead to a new wave of liquidity injections and may benefit alternative risk assets like crypto, which may fare better than stocks that could struggle in a slowing economy.”