Bitcoin Takes Back $67K as Dollar Index Rally Hits a Roadblock on Beige Book Findings
Bitcoin (BTC) has regained momentum, surging above $67,000, following the release of the Federal Reserve’s (Fed) Beige Book report. The report indicates a rather lackluster economic outlook, further fueling expectations for rate cuts in the near future.
In the latest Beige Book edition, nine out of 12 regional banks reported stagnant or slightly weak economic activity since early September. Manufacturing activity has declined in most districts, while consumer demand has shown signs of moderation. Additionally, there has been a moderation in inflation, slight increases in selling prices, and slower wage growth.
These findings contradict the stronger-than-expected September jobs report, suggesting that further rate cuts may be necessary. Consequently, Bitcoin has rebounded from its overnight lows and is currently trading 1% higher. The rally in the dollar index (DXY) has also stalled, as the index has retreated from its overnight high.
The market has interpreted the Beige Book report as confirming the likelihood of a 25 basis points cut in November and a high probability of another cut in December. This sentiment has triggered a turnaround in the dollar across the board.
The dour Beige Book outlook was one of the key factors that prompted the Fed to cut the benchmark borrowing cost by 50 basis points in September. Following the release of the report, several Fed officials, including chairman Jerome Powell, cited it as a justification for the rate cut.
While hopes for a total 75 basis points of easing by the end of the year were dampened by the positive September jobs data and inflation report, the Beige Book findings have rejuvenated expectations for further rate reductions.