Arthur Hayes Says Fed Rate Cut Will Trigger Market ‘Crash’, Calls Move ‘Colossal Mistake’: Token2049

BitMEX co-founder Arthur Hayes said risk assets such as cryptocurrencies will collapse shortly after the Federal Reserve’s planned rate cut later today, its first in more than four years.

“I think the Fed is making a colossal mistake in cutting rates at a time when the U.S. government is printing and spending more money than it ever has in peacetime,” Hayes said. in a keynote speech at Token2049 in Singapore on September 18. “While I think a lot of people are looking forward to a rate cut, meaning they think the stock market and other factors are going to ratchet up the pressure, I think the markets are going to crash within a few days of the Fed cutting rates.”

Arthur Hayes says rate cuts add to inflationary pressure

Cutting rates is a bad idea because inflation is still a problem in the United States, with the government largely responsible for the persistent pressure on prices, he said. Making borrowing cheaper only makes inflation worse, he added.

He criticized the Federal Reserve for even considering cutting interest rates amid rising U.S. government spending and increased dollar issuance.

Now Playing: Arthur Hayes on the Main Stage pic.twitter.com/r4Nhs751Q6

— Zach Humphries (@Z_Humphries) September 18, 2024

Hayes The Fed chief warned that many investors and traders could be caught off guard. He believes the opposite scenario is more likely and that “markets will crash” in the days following the Fed’s decision.

Market Could Repeat Yen Carry Trade Crash

Hayes According to him, the interest rate cut could be 50 or 75 basis points. If such a reduction were to occur, it would “reduce the gap between the US dollar and the Japanese yen.”

The yen could then appreciate sharply, which could trigger a reduction in the yen carry trade, Mr Hayes said. He warned that the “financial stress” the market experienced earlier this year, when the yen fell from $162 to $142 in about two weeks, could be resurgent after a rate cut.

Related articles:

Most Wanted Cryptocurrency Launch – Pepe Unchained

• Level 2 Meme Coin Ecosystem
• Featured in Cointelegraph
• SolidProof and Coinsult audited
• Staking Rewards – pepeunchained.com
• Over $10 Million Raised in ICO – Ending Soon