Daily Financial Breakfast 31 October 2026: Fed’s Logan Calls for Two More Rate Hikes While Binance Reports $6.3 Billion Hack

Market News Today: Key Takeaways

• Dallas Fed President Lorie Logan called for at least two more quarter-point rate increases, while fellow Fed officials advocated a gradual approach.
• Bitcoin fell near $77,000, a six-week low, after Binance reported a $6.3 billion hack.
• The Bank of Japan held its policy rate at 1.25% in an 8–1 vote and raised its fiscal 2027 core inflation forecast to 2.6% from 2.4%.
• Gold fell to $3,880, a year-to-date low, as the U.S. dollar and Treasury yields edged higher.
• The ECB kept rates unchanged in October, while Lagarde said the policy direction remained clear unless incoming information materially changed the picture.

Market Developments

Foreign Exchange

The U.S. Dollar Index ended the week around 102.00, below its weekly high near 102.50, reversing two consecutive weekly declines. EUR/USD traded around 1.1140 on Friday after retreating from an intraday high of 1.1214.

U.S. Monetary Policy

Logan Calls for at Least Two More Quarter-Point Fed Rate Increases

Dallas Federal Reserve President Lorie Logan said on Friday that “at least two more quarter-point rate hikes” were needed. Skipping an increase “doesn’t change policy destination,” she said, adding that gradual adjustments reduce the risk of a sharp economic deterioration.

St. Louis Fed President Alberto Musalem separately said the central bank needed to raise rates “again soon,” while also favouring a gradual approach.

Richmond Fed President Thomas Barkin told SiriusXM Business Briefing that the direction of policy was “straightforward” and that the question was the pace. He described a gradual approach as “a good way to go” and said businesses had reported broader cost pressures.

Digital Assets

Bitcoin Falls to Six-Week Low After Binance Reports $6.3 Billion Hack

Bitcoin declined near $77,000 on Friday, reaching a six-week low amid selling pressure across the broader cryptocurrency market. The decline followed Binance’s report of a $6.3 billion hack.

Japan Monetary Policy

BoJ Holds Rate at 1.25% and Warns of Inflation Overshoot

The Bank of Japan left its short-term policy rate unchanged at 1.25% in an 8–1 decision. Board member Takata dissented in favour of an increase to 1.5%, while Governor Kazuo Ueda said the central bank would continue adjusting policy as needed.

The BoJ said underlying inflation had reached levels broadly consistent with its 2% target, although financial conditions remained accommodative and short-term real interest rates remained low. It raised its fiscal 2027 core CPI forecast to 2.6% from 2.4%, left its fiscal 2028 projection at 2.0%, and revised GDP growth forecasts to 0.7% for both fiscal 2026 and fiscal 2027.

Policymakers said the balance of risks had shifted from inflation undershooting the target towards the risk of an overshoot. The bank identified the Middle East conflict, stronger AI-related demand and foreign-exchange volatility as issues requiring close monitoring. Corporate funding demand was rising, while lenders remained willing to extend credit.

Ueda said the BoJ would respond proactively if needed rather than wait passively for inflation to rise. He cautioned that inflation still needed to remain sustainably around 2%, with the timing and pace of policy adjustments dependent on data, wages, financial conditions and the economic outlook, rather than a fixed timetable.

The yen outperformed most major currencies following the decision. USD/JPY remained slightly lower heading into the weekend, although it recovered some earlier losses as the U.S. dollar rebounded.

Precious Metals

Gold Falls to $3,880, Its Lowest Level This Year

Gold dropped to $3,880 on Friday, setting a year-to-date low and falling below $3,900 for the first time since October last year. The decline came as the U.S. dollar and Treasury yields edged higher, risk appetite deteriorated and Fed officials pressed the case for further rate increases.

European Monetary Policy

ECB Holds Rates as Lagarde Reiterates Meeting-by-Meeting Approach

The European Central Bank kept key interest rates unchanged in October. In comments cited by UOB economist Lee Sue Ann, Lagarde reiterated a meeting-by-meeting approach but said that, unless incoming information materially altered the current picture, “the direction of travel is quite clear.”

Lagarde noted that average 10-year sovereign yields had risen by around 35 basis points relative to the assumptions underpinning the ECB’s September projections. Equity prices had also fallen, while borrowing costs for households and businesses had increased.

Upcoming Key Events

• U.S. Manufacturing Data (2 November 2026): The final S&P Global Manufacturing PMI, ISM Manufacturing PMI and construction spending figures are scheduled for release in the United States.
• U.S. Midterm Elections (3 November 2026): Results from the U.S. midterm elections are scheduled to begin arriving.
• U.S. JOLTS Job Openings (3 November 2026): The U.S. job openings release is scheduled alongside factory orders.
• U.S. ADP Employment and Services Data (4 November 2026): The U.S. calendar includes ADP employment, the final S&P Global Services PMI, the ISM Services PMI and trade figures.
• Eurozone Preliminary Inflation (4 November 2026): Preliminary eurozone inflation figures are due, together with final services PMIs for Germany and the eurozone.
• U.S. Initial Jobless Claims (5 November 2026): Weekly U.S. initial unemployment claims and Challenger job-cut figures are scheduled for release.
• U.S. Payrolls, Unemployment and Consumer Sentiment (6 November 2026): U.S. nonfarm payrolls, the unemployment rate and the preliminary University of Michigan consumer sentiment reading are due.
• Bank of England Policy Decision: The Bank of England’s Monetary Policy Committee is scheduled to decide Bank Rate in the coming week.