Arthur Hayes says financial assets can keep rising despite Fed rate hike

BitMEX co-founder Arthur Hayes said financial assets are likely to keep rising even after the U.S. Federal Reserve’s Federal Open Market Committee raised rates for the first time since 2023. Hayes said that with U.S. government debt at elevated levels, a rate hike could instead stimulate the economy and asset markets. Holders of short-term U.S. Treasury bills, or T-bills, would also earn higher returns, which he said could lead to stronger consumption and especially greater demand for financial assets. He added that although the Fed halted asset purchases in mid-August, the combined size of Fed and bank assets continues to grow as bank balance sheets expand. Hayes said this has the effect of increasing money in circulation, and argued that financial asset prices will keep rising as interest rates, the price of money, move higher while liquidity in the broader economy also increases.