Key Notes
- Arthur Hayes predicts that a Trump administration would install loyalists on the Federal Reserve board to force policy changes.
- The primary goal would be to implement yield curve control (YCC), enabling massive government spending through money printing.
- Hayes believes this monetary policy would devalue the dollar and be highly bullish for Bitcoin's price.
BitMEX co-founder Arthur Hayes has outlined a bold scenario where Donald Trump’s second term could radically alter US monetary policy, a shift he predicts would greatly benefit Bitcoin BTC $113 000 24h volatility: 0.3% Market cap: $2.25 T Vol. 24h: $50.21 B , a natural follow-up to his recent general crypto prediction .
In his latest essay ‘Four, Seven’ published on Sept. 23, Hayes argues that a new administration would seek direct control over the Federal Reserve. According to his analysis, the goal would be to re-industrialize the economy and manage national debt by influencing the central bank’s leadership. This move would challenge the Fed’s traditional independence by stacking its seven-member Board of Governors with political allies to secure a voting majority.
A ‘Packed’ Fed and Yield Curve Control
Hayes suggests this majority could be achieved by early 2026 through strategic appointments and potential resignations. With control over the Board, the administration could then influence the selection of regional Fed bank presidents, creating a dominant voting bloc on the Federal Open Market Committee (FOMC). This would effectively give the White House direct power over the country’s money supply.
The ultimate goal, as outlined in the essay, is to implement Yield Curve Control . This policy would involve capping interest rates to finance economic initiatives. This strategy was also used during World War II. A key part of this plan would be to incentivize lending to SME (small and medium enterprises), which account for nearly half of US employment.
Hayes contrasts this with the post-2008 quantitative easing that largely benefited big corporations, dubbing the new proposal “QE 4 Poor People” for its focus on “Main Street.”
This economic strategy would require a massive credit expansion (potentially over $15 trillion by 2028), which may lead to significant dollar debasement. In such a scenario, Hayes predicts investors would rush to hard assets with a fixed supply, like Bitcoin. This echoes warnings from billionaire investors like Ray Dalio about growing US debt.
Based on a model of credit growth during the pandemic, the essay speculates on a speculative Bitcoin price of $3.4 million by 2028. While admitting the figure is speculative, Hayes emphasizes his confidence in the asset’s overall direction.
Hayes’s forecast remains a controversial take on executive influence over the central bank. Any move to compromise the Federal Reserve’s independence would likely face significant political and legal challenges and is a subject of ongoing debate among analysts.
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