Bitcoin (BTC-USD) has rebounded past $67,000, fueled by the latest Beige Book report from the Federal Reserve. This report, released on Wednesday, paints a rather lackluster picture of the economy, leading many to believe that the Fed may cut rates as early as next month. According to ForexLive, “Those [Beige Book] comments got the markets’ attention and helped to solidify the belief that another 25 bps cut is coming in November.”
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At the time of writing, Bitcoin is sitting at $67,320.89.
Beige Book Paints a Gloomy Economic Picture
The Beige Book revealed that nine out of twelve regional banks reported stagnant or slightly declining economic activity since early September. Manufacturing has taken a hit, and consumer demand appears to be cooling. Even employment growth has slowed, mainly focusing on replacement hires rather than expansion. The report indicates that inflation is moderating, with selling prices experiencing only slight increases across most districts. This gloomy outlook contrasts sharply with the robust jobs data from September, adding more fuel to the speculation about upcoming rate cuts.
Market Reactions to Economic Signals
As the economic outlook darkened, Bitcoin capitalized on the moment, recovering from lows under $65,200 to trade at $67,300, while the dollar index saw a notable pullback. The dollar index (DXY) has fallen from an overnight high of 104.57 to 104.30.
In light of the Beige Book findings, many believe that the Fed’s current environment supports the case for additional rate cuts. Markets are now pricing in a total of 75 basis points of easing before the year’s end.
