US GDP growth in the fourth quarter of 2025 was just 0.7%, revised down from 1.4%, while core PCE inflation remained at 3.1% in January.
CME FedWatch shows there is a greater than 92% chance that the Fed will leave interest rates unchanged at the March 17-18 FOMC meeting.
Bitcoin rose 4.42% on the day to trade at $73,537.
In the fourth quarter of 2025, the U.S. economy grew by just 0.7%. That number has been revised down from 1.4% by the Bureau of Economic Analysis and is already trending at X, which CNN also calls it. “It’s much weaker than previously reported.” With the March 17-18 FOMC meeting just four days away, crypto traders have one question on their minds. Will this change anything for Bitcoin?
The short answer is not yet. But the long answer is more interesting.
The economy is slowing down. The Fed cannot react.
GDP plunged from a 4.4% pace in the third quarter to 0.7% in the fourth quarter due to weaker exports, consumer services, government spending and investment. The government shutdown in October and November alone reduced growth by about 1 percentage point.
The revised annual GDP for 2025 was 2.1%.
But inflation is not cooperative. CPI for February was 2.4%, exactly in line with expectations. This morning, BEA confirmed that January core PCE remained at 3.1%, still well above the Fed’s 2% target. With growth slowing rapidly and prices remaining stable, the Fed has no clear path to lower interest rates.
The combination of slowing growth and stubborn inflation is exactly what is fueling interest in the term “stagflation 2026” this week.
market pricing
With just a few days left before the FOMC meeting, FedWatch data shows there is a 99.2% chance that the Fed will keep interest rates unchanged at 350 to 375 bps. That part seems to have been resolved.
What remains unresolved is what happens next. Traders around the world are starting to recalculate as the GDP revision changes the timeline for when interest rate cuts will actually occur.
Also read: When will Bitcoin hit the bottom? On-chain data has surprising answers
Why Bitcoin traders are paying attention
Historically, Fed rate cuts are bullish for Bitcoin. Lower interest rates drive investors into riskier assets, a weaker dollar and an increased appetite for alternatives to traditional finance. The longer the Fed maintains policy as economic growth slows, the more likely it will eventually have to cut rates.
Bitcoin is currently trading at $73,537, up 4.42% on the day, holding its ground despite the stock market decline. Its resilience against the backdrop of low growth and the US-Israel-Iran war is what crypto traders are currently paying attention to.
A rate cut is unlikely at the March 17-18 meeting. But with the economy slowing faster than expected, with GDP in the fourth quarter at 0.7%, the question is not if, but when, the Fed will cut rates in 2026.
And when that reduction occurs, Bitcoin will take note.
This may be interesting: Decoupling at last? Why cryptocurrencies are up 2.57% today while stocks are down
