Digital asset trading firm QCP said in its latest market report that the Federal Reserve, the European Central Bank and the Bank of Japan all kept interest rates unchanged this week, though markets are still pricing in possible December hikes from the ECB and BOJ.
Central banks hold, but December expectations remain
QCP said the Fed voted 10-2 at its October meeting to keep the federal funds rate unchanged at 3.75% to 4.00%. Fed Chair Warsh did not commit to any rate adjustment in December or after that.
The Fed also announced that one meeting in 2027 and two meetings in 2028 will not include rate votes and will instead be used to discuss monetary policy strategy. QCP said fewer decision points could allow more economic data to accumulate between meetings, making markets more sensitive to changes in the data and adding to rate volatility and term premium.
The ECB also left rates unchanged, citing the fact that earlier inflation data had not yet produced second-round effects. Even so, the market still expects a possible rate hike in December. The BOJ likewise kept rates unchanged and said inflation has reached its 2% target, with markets also pricing in the possibility of a December hike.
Tech earnings add pressure
QCP said shares of Alphabet, Amazon, Meta and Intel all fell after the companies released quarterly results. The market is watching both current earnings performance and future capital expenditure plans, with particular attention on the pace of AI infrastructure expansion and its profitability.
Binance security incident briefly hit activity
In crypto markets, QCP said Binance suffered a major security incident on Friday morning, affecting about $6.3 billion in assets. The event briefly led to a drop in crypto trading activity in its early stage.
QCP said the market later stabilized, with participants appearing to treat the incident as company-specific risk rather than a systemic event affecting the broader crypto market or its infrastructure. In QCP's view, uncertainty around central bank policy, concerns over tech companies' capital allocation and the Binance security incident together pushed the market into a repricing phase.
