US GDP Contracts 0.3% in Q1 2025, Stagflation Fears Rise

15:04 30.04.2025 CVJ.AI Editorial Office

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The US economy contracted at an annualized rate of 0.3% in Q1 2025, sparking stagflation concerns. Bitcoin and equities dipped slightly as recession odds surged to 71% on Polymarket.

Core PCE inflation rose 3.5%, reinforcing stagflation concerns amid GDP contraction.
Polymarket's recession probability surged to 71% following the GDP release.
Divergent Fed models (Atlanta Fed -2.7% vs. NY Fed +2.6%) reflected pre-release uncertainty.

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Related Tags: Bitcoin

Other Tags: Atlanta Fed, Commerce Department, New York Fed, Polymarket

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US GDP Contracts 0.3% in Q1 2025, Stagflation Fears Rise

The US Commerce Department reported a 0.3% annualized GDP contraction in Q1 2025, missing forecasts of 0.4% growth. Key drivers included rising imports and reduced government spending, partially offset by consumer and business investment. Inflation remained elevated, with the core PCE price index rising 3.5%. Trading Economics revised its Q2 forecast to -1.2%, signaling a likely technical recession. Financial markets reacted cautiously, with Bitcoin dropping 0.5% and S&P 500 futures falling 0.77%. The Atlanta Fed's GDPNow model had predicted a steeper -2.7% decline, highlighting economic uncertainty ahead of upcoming BEA revisions in May and June.

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