Arthur Hayes Predicts Continued Financial Asset Growth Despite US Fed Rate Hike

BitMEX co-founder Arthur Hayes predicts that financial asset prices will continue to rise even after the U.S. Federal Reserve’s first interest rate increase since 2023. He explained that with high U.S. government debt, rate hikes could stimulate both the economy and asset markets, as higher yields on short-term Treasury bills (T-Bills) encourage spending, particularly boosting demand for financial assets.

Hayes noted that although the Fed ceased asset purchases in mid-August, bank balance sheets have expanded, causing combined reserves of the Fed and banks to grow. This expansion increases money supply, leading to rising interest rates alongside higher liquidity, which he believes will continue to drive financial asset prices upward.