Arthur Hayes , co-founder of BitMEX, recently Chia his views on the US Federal Reserve (Fed) cutting interest rates by 50 basis points, arguing that the move could be politically motivated and impact markets as well as inflation.
At Token2049 in Singapore on September 18, Hayes speculated that this could be part of an effort to increase support for the Democratic Party:
“I have a macro view that Fed Chair Jerome Powell and Treasury Secretary Janet Yellen are trying to influence financial markets to help Kamala Harris win the election.”
On September 18, the Fed made a 50 basis point interest rate cut , which many investors and analysts had anticipated. Hayes emphasized that the decision could have profound impacts on both traditional and crypto markets, and have long-term consequences for inflation and economic stability.
He pointed to the discrepancy between the rate cut and current economic indicators, stating that the US economy is showing strong GDP growth while unemployment remains at historically low levels.
He argues that making Capital cheaper for the government could conflict with concerns about government spending:
“I believe they are trying to prop up the market so that people feel richer when they go to the polls in November, and inflation will pick up after that.”
Regarding the crypto market’s reaction to the rate cut, which resulted in a 4% gain, he said “this is the calm before the storm” and predicted that a more significant reaction will likely come after traditional markets close on Friday, with crypto likely to follow suit over the weekend.
The cryptocurrency market has added $100 billion since the Fed’s announcement, with Bitcoin rising to $62,146, close to a three-week high of $62,500 in morning trading on September 19.
Source: TradingView
Hayes said all eyes are now on the Bank of Japan, which will make its interest rate decision on Friday, September 20. He believes that a weaker Japanese yen will benefit BTC. However, he also warned that a stronger yen and the removal of yen carry trade could put pressure on the price of Bitcoin and other assets in the near term.
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According to Cointelegraph
