SUMMARY
- Bitcoin surged above $67K as the Beige Book report supported expectations for Fed rate cuts in November and December.
- The dollar index (DXY) stalled, boosting Bitcoin’s recovery from recent lows.
Bitcoin (BTC) climbed back above $67,000 following the release of the Federal Reserve’s latest Beige Book, which painted a stifled economic viewpoint, increasing the probability of further interest rate cuts. The report appeared that nine of the twelve regional banks experienced stagnation or a slight decrease in economic activity since early September. Consumer request and manufacturing output also weakened across different districts.
The report noted that inflation pressures eased, with only slight increments in selling prices in most areas. Business rose modestly but essentially through substitution hiring rather than development. Wage increments were also moderated, recommending less upward pressure on costs. The cautious viewpoint aligns ineffectively with September’s more grounded jobs report, but it provides the Fed with a reason to cut rates further. Markets presently anticipate quarter-point cuts in both November and December.
Bitcoin reacted certainly to the report, recouping from lows below $65,200 to trade at $67,300, up 1% daily. The dollar index (DXY) pulled back to 104.30 after briefly coming to 104.57, proposing the Beige Book may have decreased bullish sentiment for the dollar. A weaker dollar regularly bolsters Bitcoin’s price, increasing its appeal to investors.
Jerome Powell and other Fed officials had referenced the Beige Book outlook in September when they reduced interest rates by 50 basis points to a 4.75%-5% range. Whereas recent inflation and job reports had brought down expectations for additional cuts, the most recent economic signals may have recharged hopes for further easing by the end of the year.
Markets presently expect an extra 75 basis points of rate cuts before 2024, even though stronger-than-expected expansion information may constrain further easing. ForexLive noted that the Beige Book had “solidified” expectations for a 25-bps cut in November, with another likely in December. The move in the dollar index, which turned lower after the Beige Book release, reflects market expectation of this policy shift.
Bitcoin’s reestablished strength and the dollar’s pause come at a time when macroeconomic forces are playing a central role in forming cryptocurrency trends. The interaction between rate policy, inflation, and employment information will likely continue to impact Bitcoin’s direction in the months ahead.