A weaker-than-expected U.S. economic performance and easing inflation data have revived hopes of a more dovish Federal Reserve, with analysts predicting that Bitcoin (BTC) could benefit more than stocks in the coming months. Analysts Say Contraction in US GDP, Falling Inflation Raises Hopes for Fed Rate Cut The U.S. economy contracted for the first time in three years and the Fed’s preferred inflation gauge, Core Personal Consumption Expenditures (PCE), was flat in the latest month. Core PCE fell to 2.6% on an annual basis from 3.0%, reinforcing the narrative that inflation is slowly easing toward the central bank’s 2% target. Bitcoin Leads the Recovery Following the data release, Bitcoin surged past $97,000, gaining more than 13% since “Independence Day,” a symbolic term referring to a renewed rally among crypto investors. In contrast, the S&P 500 has gained less than 1% over the past 30 days, highlighting the growing divergence between digital assets and traditional equity markets. “With inflation moving toward the Fed’s 2% target, expectations of multiple rate cuts are strengthening. This could lead to a new wave of liquidity injections and benefit alternative risk assets like crypto more than equities, which may struggle in a slowing economy,” BRN chief research analyst Valentin Fournier said in a May 2 market update. *This is not investment advice. Continue Reading: Analysts Assess the Effect of Softening US Inflation Data on the Likelihood of a Fed Rate Cut and Bitcoin! Here Are the Details