US Economy Slows to 1.5% Growth in Q2, Bitcoin Rises Above $65K

• US GDP grew at an annualized 1.5% in the second quarter, below economists’ expectations of 1.8%
• Consumer spending accelerated to 3.2%, helping support economic activity despite higher energy costs
• Bitcoin traded above $65,000 as investors assessed what slower growth could mean for future Federal Reserve policy

The US economy lost momentum in the second quarter. It was seen expanding at a slower pace than economists had expected as higher borrowing costs and rising energy prices continued to weigh on growth. The weaker US GDP reading came a day after the Federal Reserve left interest rates unchanged. This gave investors fresh clues about the health of the economy. Even with the softer growth figures, markets remained relatively steady, with Bitcoin climbing back above $65,000 after the data release.

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Consumer Spending Stays Strong

The US Commerce Department said the economy grew at an annualized 1.5% during the April-to-June period. This is down from 2.1% in the first quarter and below the 1.8% forecast from economists surveyed by The Wall Street Journal.

The headline figure masked stronger demand. Consumer spending, which makes up roughly two-thirds of the US economy, increased at a 3.2% annual pace after growing just 0.5% in the previous quarter. Americans spent more on both goods and services, supported by a still-solid labor market and tax cuts.

At the same time, higher fuel costs continued to pressure households. According to AAA, gasoline prices remained above $4 a gallon for much of the quarter after tensions in the Middle East pushed oil prices higher. Those costs kept US inflation high even as June’s Personal Consumption Expenditures (PCE) index, the Federal Reserve’s preferred inflation measure, cooled broadly in line with expectations.

The GDP report followed Wednesday’s Federal Reserve meeting, where policymakers voted 9-3 to keep interest rates in a 3.5% to 3.75% range. Three officials backed another quarter-point increase. This points to continued concern that inflation remains above the central bank’s 2% target.

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Bitcoin Holds Above $65K After GDP Report

The softer Q2 GDP data did little to derail crypto markets. Bitcoin price traded above $65,000 after the report. It was seen extending its recovery despite recent pressure from geopolitical tensions, higher oil prices, and uncertainty over the Fed’s policy path. But at press time, the world’s largest cryptocurrency was trading at $64,815.26 following a slight correction.

The reaction suggests traders were looking beyond the weaker growth figure and focusing on the broader picture. While the economy is expanding more slowly, consumer spending and cooling inflation have yet to produce a clear signal that the Federal Reserve is ready to change course.

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