- Atlanta Fed updates GDPNow model, reflecting slight economic improvement.
- Estimates show U.S. GDP growth at -2.2% for Q1 2025.
- Stock and crypto markets show significant losses following the update.
The Federal Reserve Bank of Atlanta updated its GDPNow model on April 16, 2025, revising the U.S. GDP growth estimate for Q1 2025 to -2.2%.
The slight improvement from a previous -2.4% estimate signals ongoing economic challenges with some positive developments influencing markets.
Atlanta Fed’s GDPNow Model Predicts -2.2% GDP for Q1
The Atlanta Fed’s GDPNow model has adjusted its first-quarter GDP growth estimate to -2.2% from the earlier -2.4%, reflecting minor economic improvement. Contributing factors include enhancements in personal consumption expenditures. Stock futures fell significantly post-update, likely signaling market concern about continued economic contraction.
U.S. stock index futures dropped sharply, with Nasdaq futures declining by 2% and S&P 500 by 1.29%. This suggests investor unease over lower-than-expected economic growth, possibly exacerbating fears of recession. Official commentaries indicated that GDPNow is a model output, not a definitive Federal Reserve forecast, emphasizing its data-driven nature. Cryptocurrency markets mirrored this sentiment, with significant declines noted in Bitcoin and COIN50 Index levels.
“The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2025 is -2.2 percent on April 16, up from -2.4 percent on April 9.” — Federal Reserve Bank of Atlanta, Commentary on GDPNow Model, Atlanta Fed
Market Reactions: Stock and Crypto Prices Tumble
Did you know? During past economic downturns, flight-to-quality trends often emerge, pushing investors towards stablecoins and traditional assets like gold, affecting both equity and cryptocurrency markets adversely.
According to CoinMarketCap, Bitcoin (BTC) is trading at $85,028.04 with a market cap of formatNumber(1,687,988,518,640.05), or “1.69 trillion”. The total crypto market capital remains under pressure with 24-hour trading volume at formatNumber(25,289,456,172.42), or “25.29 billion” (-11.85% change). Price changes over 24 hours are 0.13%, with 7-day gains of 10.18%.
Coincu’s research suggests potential economic stabilization could lead to renewed interest in crypto if macro conditions stabilize by the second half of 2025, potentially catalyzing resumptions in venture funding and market activity. Historical trends show such cycles impacting altcoins and DeFi protocols significantly, warranting cautious optimism among investors.
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