The Beige Book has bolstered hopes for the Federal Reserve to cut rates by 25 basis points in November and December.

After the release of the Beige Book report, the dollar index's upward momentum stalled, paving the way for a recovery in Bitcoin.

The latest U.S. economic conditions survey from the Federal Reserve released on Wednesday shows a bleak outlook, providing justification for further rate cuts in the coming months, with Bitcoin (BTC) returning above $67,000.

The latest version indicates that since the beginning of September, 9 out of 12 regional banks reported stagnant or slightly weaker economic activity. Manufacturing activity has declined in most regions, and signs of some slowing in consumer demand have emerged.

Due to only modest increases in sales prices across most regions, inflation or the cost of living continues to slow. Employment numbers have increased, but hiring is mainly focused on replacement rather than growth. Meanwhile, several regions noted a slowdown in wage growth.

Overall, the weak outlook contradicts the stronger-than-expected employment report for September and opens the door for further rate cuts by the Federal Reserve.

As of the time of writing, Bitcoin has rebounded from an overnight low of $53,500, rising 1% to $67,300, while the dollar index (DXY) has stalled its upward momentum. According to data from TradingView, the index has fallen from an overnight high of 104.57 to 104.30.

"These [Beige Book] comments have caught the market's attention and help to solidify the belief that there will be another 25 basis point cut in November, with a strong possibility of a rate cut in December. The dollar then turned around completely," ForexLive noted in a blog post.

Several Federal Reserve officials, including Chairman Jerome Powell, stated that the bleak outlook in the Beige Book was one of the reasons they lowered the benchmark borrowing cost by 50 basis points to the range of 4.75%-5% in September.

The market quickly expects further implementation of 75 basis points of easing by the end of the year. However, the optimistic employment data for September and the stronger-than-expected inflation report for September have weakened those hopes.

This article is for reference only and does not constitute investment advice.