Arthur Hayes Says Fed’s New Liquidity Tool is QE by Another Name
Arthur Hayes, co-founder of BitMEX, claims the Federal Reserve’s new “reserve management purchases” (RMP) program is essentially rebranded quantitative easing. By buying short-term Treasury bills and adding liquidity to money markets, Hayes argues the Fed is funding government spending while avoiding political backlash. He asserts this process is highly inflationary, boosting the value of scarce assets like Bitcoin, gold, and silver, to the benefit of asset holders but to the detriment of those without assets, whose purchasing power and wages erode. Hayes warns that such monetary policy weakens the connection between labor and economic output. The Fed, meanwhile, insists RMP is a temporary measure to ensure ample reserves, especially during periods of market stress, starting with $40 billion in purchases in the first month. Despite a recent rate cut and the RMP announcement, analysts expect uncertainty for Bitcoin until more cuts occur, likely post-2026. Market odds heavily favor no near-term change in Fed policy. Jerome Powell's Fed chair term ends in May 2026, with Kevin Hassett rumored as a top candidate for his replacement if Donald Trump returns to office.
