Daily Financial Breakfast 31 October 2026: Two Additional Rate Hikes Urged by Fed’s Logan as Binance Reports Hack Worth $6.3 Billion

Market News Today: Gold Retreats as Bitcoin Hits Six-Week Low

• At least two further quarter-point rate increases were warranted, according to Dallas Fed President Lorie Logan, as other Fed officials backed a measured pace of tightening.
• A $6.3 billion hack reported by Binance was followed by a fall in Bitcoin towards $77,000, marking a six-week low.
• An increase in the fiscal 2027 core inflation forecast from 2.4% to 2.6% accompanied the Bank of Japan’s 8–1 decision to maintain its policy rate at 1.25%.
• Slight gains in the US dollar and Treasury yields sent gold down to $3,880, its lowest level so far this year.
• With ECB rates left on hold in October, Lagarde maintained that the policy path remained clear provided incoming information did not materially change the assessment.

Markets Respond to Policy Signals

Dollar Ends Two-Week Losing Run

After two successive weekly falls, the U.S. Dollar Index recovered to close the week at around 102.00, short of its weekly high near 102.50. An intraday peak of 1.1214 gave way to a retreat in EUR/USD on Friday, leaving the pair trading around 1.1140.

Fed Officials Back Further Tightening

Logan Backs a Minimum of Two Further Quarter-Point Fed Rate Rises

“At least two more quarter-point rate hikes” were necessary, Dallas Federal Reserve President Lorie Logan said on Friday. She argued that moving gradually reduced the risk of a sharp weakening in the economy, adding that forgoing an increase “doesn’t change policy destination,”.

Although he supported a gradual approach, St. Louis Fed President Alberto Musalem said separately that rates needed to go up “again soon,”.

For Richmond Fed President Thomas Barkin, the pace was the question, with the policy direction “straightforward”, he told SiriusXM Business Briefing. Calling gradual adjustments “a good way to go”, he added that businesses were reporting cost pressures across a wider range of areas.

Selling Spreads Across Digital Assets

Bitcoin Retreats to Six-Week Low Following Binance’s $6.3 Billion Hack Disclosure

A six-week low near $77,000 was reached by Bitcoin on Friday as selling spread across the cryptocurrency market. Binance had reported a $6.3 billion hack before the decline.

Japan Leaves Policy Rate Unchanged

BoJ Keeps Rate at 1.25% as Inflation Risks Tilt Towards an Overshoot

Board member Takata’s preference for a rise to 1.5% was the sole dissent in an 8–1 Bank of Japan vote to hold the short-term policy rate at 1.25%. Further policy adjustments would be made as needed, Governor Kazuo Ueda said.

Underlying inflation was broadly in line with the BoJ’s 2% target, the bank said, despite still-accommodative financial conditions and low short-term real interest rates. Alongside an upward revision to fiscal 2027 core CPI inflation from 2.4% to 2.6%, it maintained its fiscal 2028 forecast at 2.0%. The GDP growth forecasts for fiscal 2026 and fiscal 2027 were both revised to 0.7%.

An overshoot had displaced below-target inflation as the greater risk, policymakers said. The Middle East conflict, increased AI-related demand and volatility in foreign exchange required close scrutiny, according to the bank. Lenders remained prepared to supply credit as companies’ funding needs grew.

The BoJ would not simply wait for inflation to rise but would respond proactively if required, Ueda said. He nevertheless warned that inflation needed to remain sustainably around 2%. Policy changes would follow no predetermined timetable: their timing and pace would depend on data, wages, financial conditions and the economic outlook.

Most major currencies were outpaced by the yen in the wake of the decision. A recovery in the US dollar subsequently allowed USD/JPY to regain some lost ground, although the pair remained slightly lower going into the weekend.

Precious Metals Lose Ground

Gold Breaks Below $3,900 to Reach $3,880 Yearly Low

For the first time since October last year, gold slipped below $3,900 on Friday, reaching a year-to-date low of $3,880. Small rises in the US dollar and Treasury yields coincided with the fall, alongside reduced risk appetite and Fed officials’ calls for additional rate increases.

European Rates Remain on Hold

ECB Leaves Rates Unchanged While Lagarde Retains Meeting-by-Meeting Stance

October saw the European Central Bank maintain its key interest rates. UOB economist Lee Sue Ann cited Lagarde’s reaffirmation that decisions would be taken meeting by meeting. Lagarde nevertheless said “the direction of travel is quite clear.” unless incoming information materially changed the current assessment.

Average 10-year sovereign yields stood around 35 basis points above the assumptions underlying the ECB’s September projections, Lagarde said. She also highlighted a decline in equity prices and a rise in borrowing costs for households and businesses.

Data Releases and Policy Decisions Ahead

• US Manufacturing Releases Come Into Focus (2 November 2026): Construction spending figures are due in the United States, together with the final S&P Global Manufacturing PMI and ISM Manufacturing PMI.
• US Midterm Results Begin to Arrive (3 November 2026): The first results from the U.S. midterm elections are due to come through.
• US JOLTS Job Openings Share the Calendar With Factory Orders (3 November 2026): The scheduled U.S. releases pair job openings with factory orders.
• US ADP Employment and Services Releases Are Due (4 November 2026): Trade figures and ADP employment feature on the U.S. calendar, along with the final S&P Global Services PMI and the ISM Services PMI.
• Eurozone Inflation and Services Figures Are Scheduled (4 November 2026): Final services PMIs for Germany and the eurozone are due alongside the eurozone’s preliminary inflation figures.
• US Initial Claims Accompany Challenger Job-Cut Release (5 November 2026): Challenger job-cut figures are due alongside the weekly U.S. initial unemployment claims release.
• US Payrolls and Unemployment Precede Consumer Sentiment Reading (6 November 2026): The release calendar covers U.S. nonfarm payrolls, the unemployment rate and the preliminary University of Michigan consumer sentiment reading.
• Bank of England Sets Bank Rate in the Week Ahead: A decision on Bank Rate is due from the Bank of England’s Monetary Policy Committee in the coming week.