Arthur Hayes spoke after the Fed cut interest rates by 50 basis points.
Former BitMEX CEO Arthur Hayes has claimed that the recent interest rate cut by the US Federal Reserve (FED) was politically motivated and would increase inflation. In an interview with Cointelegraph at the Token2049 event in Singapore on September 18, Hayes claimed that the FED’s move was aimed at supporting the Democratic Party.
Hayes said that Fed Chair Jerome Powell and Treasury Secretary Janet Yellen are trying to stimulate financial markets to give Kamala Harris an advantage in the presidential election. He said that he thinks the 50 basis point interest rate cut on September 18 is part of this strategy.
Hayes emphasized that this interest rate cut will have significant effects on both traditional and cryptocurrency markets, and pointed out that it could have serious consequences on inflation and economic stability in the long run.
Citing current indicators of the US economy, he argued that such a rate cut does not make sense despite strong growth and low unemployment rates.
Bitcoin rally could reverse in November
Hayes said making it cheaper for the government to borrow contradicts concerns about overspending. “I think they are trying to push the market higher so that people feel richer when they go to the ballot box,” he said. He also said he believes inflation will accelerate after the reduction.
While the initial reaction of crypto markets to the cut was a 4% increase, Hayes predicted that this move is temporary and the real reaction will begin when traditional financial markets close on Friday. Bitcoin hit a three-week high of $62,500 following the Fed’s decision.
Hayes stated that the interest rate decision to be taken by the Bank of Japan on September 20 could also play a decisive role in Bitcoin prices. He said that a weakening Japanese yen would strengthen Bitcoin, but if the yen gains value, it could put pressure on Bitcoin and other assets in the short term.
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