#Token2049
Fed rate cuts may be politically motivated and will increase inflation. Arthur Hayes
The former BitMEX boss said the Fed has acted in the interests of presidential candidate Kamala Harris.
Arthur Hayes, co-founder of BitMEX, thinks that the only reason behind the Federal Reserveâs recent downgrade of interest rates is political and that it will have an effect on markets and inflation.
In an interview with Cointelegraph during Token2049, which took place in Singapore on September 18th, Hayes shared his thoughts about what could have motivated this action by The Fed speculating that it might be some campaign support for the Democratic Party:
âI am looking at it from a macro view that Jerome Powell [the chairman] and Janet Yellen [who is the Treasury secretary] want to pump up financial markets so that Kamala Harris can win the nomination.â
The Federal Reserve lowered its interest rate by 50 points on the eighteenth day of September, something that had been expected by investors and professionals in the sector.
This will have huge effects on conventional and cryptocurrency markets, with a lasting impact on inflation and economic stability.
He noted a divergence between the rate cut and current economic indicators, saying that if the United States continues experiencing robust gross domestic product growth despite huge unemployment by historical standards, no one would decrease short-term interest rates.
He explained that making borrowing easier for the government was inconsistent with fears of irresponsible government spending:
âI think they are trying to drive market prices up further, to take them into Novemberâs ballot box in a richer condition, and then the inflation is going to take off.â
$BTC $
