-- Beige Book bolsters hopes for a quarter percentage point Fed rate cut in November and December.
-- Rally DXY halted after Beige Book report, paving the way for #BTC☀ 's recovery .
Bitcoin ($BTC
) climbed back above $67,000 as the latest Beige Book survey of U.S. economic conditions released by the Federal Reserve (Fed) on Wednesday showed a subdued outlook, confirming the need for further rate cuts in the coming months.
In the latest release, nine of 12 regional banks reported stagnant or slightly weak economic activity since early September. Most districts saw a downturn in manufacturing activity, as well as some signs of slowing consumer demand.
Inflation or the cost of living continued to decline as sales prices rose slightly or modestly in most counties. Employment increased slightly, but hiring focused mostly on replacement rather than growth. Meanwhile, a few counties pointed to slower wage growth.
Overall, the sluggish outlook contradicts the more positive-than-expected September employment report and opens the door for further Fed rate cuts.
#Bitcoin❗ recovered from overnight lows below $53,500 and traded 1% higher for the day at $67,300 at press time, while the Dollar Index Rally (DXY) stalled. The index retreated to 104.30 from an overnight high of 104.57, according to data source TradingView.
“These comments [on Beige's book] caught the attention of the Markets and helped build confidence that there will be another 25 basis point decline in November and there is a high probability of ONE in December . After that, the dollar reversal occurred across the board,” ForexLive noted in its blog.
Several Fed officials, including Chairman Jerome Powell, cited the Beige Book's gloomy outlook for ONE of the reasons for the 50 basis point decline in the benchmark borrowing cost to the 4.75-5% range in September.
Markets QUICKLY estimated an additional 75 basis points of easing by year-end. However, those hopes were undermined by upbeat employment data for September and a hotter than expected inflation report for September.
