Arthur Hayes, founder of BitMEX, has expressed his view that the Federal Reserve has reached a critical point, with markets awaiting its next move.
Problems Faced by the Fed and Current Market Situations
Arthur Hayes noted in his post on platform X that the Fed has found itself in a difficult position. He emphasized that stock markets are on the decline while the yield on 10-year bonds is increasing, which he views as a signal of crisis. Hayes stated, "Stocks down, 10-yr yield up, bad!" This shift in dynamics, where both indicators moved in the same direction, now indicates upcoming issues.
Bond Market Reaction to Hayes' Statements
As Hayes enacted his predictions, the stock markets reacted nervously. For example, the yield on 10-year bonds increased by 12 basis points, reaching 4.386%. Traders' expectations for the Fed to lower interest rates by May rose to 56%, compared to 40% earlier the same day. These changes are driven by a lack of dollars from exports and the risks of selling debt obligations by other countries.
Speculations on Fed's Actions and Their Consequences
Hayes also speculated that if the Treasury cancels upcoming auctions for 10- and 30-year bonds, it may indicate 'secret money printing'. He pointed out that regardless of what Jerome Powell does next, it suggests a need for an increase in the money supply. Hayes asserts that no matter what happens next, "this already looks like a green light for Fed intervention".
Arthur Hayes' statements highlight the serious risks and complexities the Fed faces in the current economic situation. Meanwhile, market reactions to his words reflect increasing concerns among traders and investors.
