**Fed Rate Cut Sparks Debate on Market Impact and Inflation**

BitMEX co-founder Arthur Hayes suggests the Federal Reserve's recent rate cut might be politically motivated. Speaking at Token2049 in Singapore, Hayes speculated that the move aims to boost support for Democrats, particularly Kamala Harris, ahead of the elections.

On September 18, the Fed cut interest rates by 50 basis points, a widely anticipated move. Hayes believes this could have significant implications for both traditional and crypto markets, potentially accelerating inflation and affecting economic stability.

Despite strong GDP growth and low unemployment, Hayes criticized the rate cut, arguing it contradicts concerns about government spending. He predicts a delayed market reaction, with crypto markets possibly following traditional financial markets' lead over the weekend.

Crypto markets have already seen a $100 billion gain since the announcement, with Bitcoin hitting a three-week high of $62,500. Hayes also pointed to the Bank of Japan's upcoming rate decision, suggesting a weaker yen could strengthen Bitcoin, while a stronger yen might pressure asset prices.

During his keynote, Hayes labeled the Fed's rate cut a "colossal mistake" amid rising US dollar issuance and government spending. He previously predicted a Bitcoin crash below $50,000, which didn't materialize, and later forecasted a Bitcoin rally.

Cointelegraph reached out to the Federal Reserve for comment but received no immediate response.