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BitMEX co-founder Arthur Hayes made waves at the Token2049 event in Singapore by offering a controversial take on the Federal Reserve’s latest decision to cut interest rates by 50 basis points. Hayes suggested that the move was driven by political motives, with the aim of boosting financial markets ahead of the U.S. elections.
BitMEX co-founder argued that the rate cut wasn’t entirely an economic necessity. Instead, he claimed that Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen were looking to create a favorable economic environment to help the Democratic Party’s prospects in the upcoming election.
“They want to juice financial markets to help Kamala Harris win,” Hayes remarked, indicating his belief that the strategy was more about gaining political support than addressing economic concerns.
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Fed Rate Cut
The Federal Reserve’s rate cut, while widely expected by investors, came at a time when the U.S. economy showed signs of resilience, with solid GDP growth and low unemployment.
Hayes pointed out this apparent contradiction, noting that there was little justification for cheaper borrowing under such strong economic conditions. He also warned that this could lead to increased inflation down the road, as the government might take advantage of lower borrowing costs to ramp up spending.
Hayes expressed concerns about the long-term implications of the rate cut on both traditional financial and crypto markets. “It’s calm before the storm,” he said, predicting that the full impact of the Fed’s decision wouldn’t be felt until after traditional markets closed on Friday, potentially leading to a volatile weekend for crypto markets.
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Japan’s Decision on interest Rates
Hayes recently turned his attention to the Bank of Japan’s upcoming decision on interest rates, which he believes could further strengthen Bitcoin if the yen weakens. In a social media post on September 19, Hayes stated that all eyes were now on Japan as the next key player to watch in global financial policy shifts.
While offering his insights, Hayes didn’t shy away from criticizing the Fed’s broader monetary policy, labeling the rate cut amid soaring U.S. government spending as a “colossal mistake.” Earlier in the month, Hayes had predicted a steep Bitcoin crash below $50,000, which failed to materialize, but has since shifted his stance, forecasting potential gains for Bitcoin in the near future.
