According to CoinDesk, Bitcoin has surged above $67,000 following the Federal Reserve's latest Beige Book survey, which presented a subdued economic outlook and strengthened the case for potential rate cuts in the coming months.
The Beige Book report, released on Wednesday, indicated that nine out of twelve regional banks reported stagnant or slightly weak economic activity since early September. The report highlighted a decline in manufacturing activity and signs of moderation in consumer demand across most districts.
Inflation, or the cost of living, showed signs of moderation as selling prices increased slightly or modestly in most districts. Employment saw a slight increase, with hiring primarily focused on replacement rather than growth. Additionally, several districts noted slower wage increases.
Overall, the sluggish economic outlook contrasts with the hotter-than-expected September jobs report, paving the way for further rate cuts by the Federal Reserve. Bitcoin has rebounded from overnight lows under $53,500 to trade 1% higher at $67,300 at press time. Meanwhile, the dollar index (DXY) rally has stalled, pulling back to 104.30 from an overnight high of 104.57, according to TradingView data.
ForexLive noted that the Beige Book comments captured market attention and solidified the belief that another 25 basis points cut is likely in November, with a high chance of an additional cut in December. The dollar's turn was observed across the board following the report.
Several Federal Reserve officials, including Chairman Jerome Powell, cited the Beige Book's dour outlook as a reason for cutting the benchmark borrowing cost by 50 basis points to the 4.75%-5% range in September. Markets quickly priced in an additional 75 basis points of easing by the year's end. However, these hopes were tempered by the upbeat September jobs data and the hotter-than-expected September inflation report.
