QCP: Fed holds rates steady with a 10-2 vote; Binance incident intensifies market repricing

BlockBeats news, October 30 - QCP stated in its latest market report that the Federal Reserve, European Central Bank, and Bank of Japan all kept interest rates unchanged this week, but the market is still betting that the ECB and BOJ may raise rates in December. The Federal Reserve, in its October meeting, voted 10 to 2 to keep the federal funds rate at 3.75% to 4.00%. Fed Chair Warsh made no commitment to rate adjustments in December and beyond.

Additionally, the Federal Reserve announced that one meeting in 2027 and two meetings in 2028 will not hold rate votes and will be used solely for discussing monetary policy strategy. QCP believes that fewer decision points may allow more economic data to accumulate between meetings, making the market more sensitive to data changes and increasing interest rate volatility and term premiums. The European Central Bank kept rates unchanged, citing that previous inflation data had not yet produced second-round effects, but the market still expects it may raise rates in December. The Bank of Japan also kept rates unchanged and stated that inflation has reached the 2% target, and the market is also pricing in the possibility of a December rate hike.

In tech stocks, Alphabet, Amazon, Meta, and Intel all saw share price declines after reporting quarterly results, with market concerns about current corporate earnings performance and future capital expenditure plans, especially focusing on the pace of expansion and profitability of AI infrastructure investments. In the crypto market, Binance experienced a major security incident on Friday morning, affecting approximately $6.3 billion in assets, which initially led to a decline in crypto market trading activity.

However, QCP noted that the market gradually stabilized afterward, and participants appeared to view the incident as a company-level risk rather than a systemic event affecting the entire crypto market or infrastructure. QCP concluded that central bank policy uncertainty, concerns about tech companies' capital allocation, and the Binance security incident collectively drove market repricing. Going forward, the market will focus more on economic data released between the two rate decisions, as well as guidance from tech companies on AI infrastructure capital expenditures and expected returns.