BitMEX co-founder Arthur Hayes has reiterated his stance on the incoming interest rate cut from the Federal Reserve, terming it a \u201cbad idea.\u201d<\/p>\n
In an exclusive interview<\/a> with CoinDesk on the sidelines of the Token2049 event, Hayes echoed his concern that risk assets like cryptocurrencies could crash shortly after the Fed rate cut.<\/p>\n The Fed will announce its interest rate call later today. Since 2020, the central bank has hiked its interest rate to curb inflation post-COVID. Following Fed chair Jerome Powell\u2019s keynote address from last month, there is much anticipation for a rate cut, which would entail more cash flow in the country.<\/p>\n Hayes noted that while the incoming rate cut would ease the liquidity level in the country, it would trigger an inflation problem. He added that this could strengthen the Japanese yen and cause a downtrend for risk assets denominated in U.S. dollars, including crypto assets.<\/p>\n \u201cThe rate cut is a bad idea because inflation is still an issue in the U.S., with the government being the biggest contributor to the sticky price pressures. If you make borrowing cheaper, it adds to inflation,\u201d the BitMEX co-founder said.<\/p>\n Last month, Hayes likened<\/a> the Fed\u2019s rate cut to a \u201cSugar High,\u201d stressing that the interest reduction will have a short-term impact on the crypto market. He compared this with the short-term effect of sugary food, which gives a brief energy boost. The BitMEX co-founder added that Powell\u2019s August announcement of an impending rate cut reduced the interest rate gap between the U.S. dollar and the Japanese yen.<\/p>\n Analysts expect the Bank of Japan (BoJ) to increase interest rates shortly as the Fed downsizes its rate, hopefully to regulate the USD\/JPY market.<\/p>\n The Fed\u2019s current interest rate is between 5.25% and 5.5%. The BitMEX co-founder believes the central bank will drop this figure to zero.<\/p>\n \u201cThe initial reaction is going to be negative and the central bank\u2019s response will be to do even more [cuts] to stem the crisis. So, I think that cutting rates is a bad idea, but they\u2019re going to do it anyway, and so they\u2019re going to go to zero quickly,\u201d Hayes said.<\/p>\n The post Arthur Hayes Says the Fed Rate Cut Could Cripple Crypto Market<\/a> appeared first on CryptoPotato<\/a>.<\/p>","protected":false},"excerpt":{"rendered":" BitMEX co-founder Arthur Hayes has reiterated his stance on the incoming interest rate cut from the Federal Reserve, terming it a \u201cbad idea.\u201d In an exclusive interview with CoinDesk on the sidelines of the Token2049 event, Hayes echoed his concern that risk assets like cryptocurrencies could crash shortly after the Fed rate cut. Rate Cut […]<\/p>\n","protected":false},"author":0,"featured_media":7719,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-7718","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-discovery"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/7718"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7718"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/7718\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/media\/7719"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7718"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7718"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7718"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Rate Cut Is a Bad Idea: Hayes<\/h2>\n
Hayes Says Interest Rate Going to Zero<\/h2>\n