Bitcoin (BTC) is back above $67,000 as the Federal Reserve’s (Fed) latest Beige Book survey of economic conditions across the U.S. released Miércoles portrayed a subdued outlook, bolstering the case for further rate reductions in the coming months.
The latest edition had nine out of 12 regional banks reporting stagnant or slightly weak economic activity since early Septiembre. Most districts witnessed a decline in manufacturing activity, with some signs of moderation in consumer demand.
Inflation or cost of living continued to moderate as selling prices increased slightly or modestly in most districts. Employment increased somewhat, but hiring focused primarily on replacement rather than growth. Meanwhile, multiple Districts pointed to slower wage increases.
On balance, the sluggish outlook contradicts the hotter-than-expected Septiembre jobs report and opens door for further rate cuts by the Fed.
Bitcoin has recovered from the overnight lows under $53,500 to trade 1% higher on the day at $67,300 at press time, and the dollar index (DXY) rally has stalled. The index has pulled back to 104.30 from the overnight high of 104.57, according to data source TradingView.
“Those [Beige book] comments got the markets’ attention and helped to solidify the belief that another 25 bps cut is coming in Noviembre and a high chance of one in Diciembre. The turn in the dollar was across the board afterward,” ForexLive noted in the blog post.
Several Fed officials, including chairman Jerome Powell, cited the dour Beige Book outlook as one of their reasons for cutting the benchmark borrowing cost by 50 basis points to the 4.75%-5% range in Septiembre.
Markets were quick to price an additional 75 basis points of easing by the year’s end. Those hopes, however, were dented by the upbeat Septiembre jobs data and the hotter-than-expected Septiembre inflation report.
