Arthur Hayes, co-founder of BitMEX, posted on his personal social media that my views on the reasons why the Federal Reserve's interest rate cut plan did not meet expectations are as follows: Bitcoin has fallen by 10% since Powell announced the September interest rate cut in Jackson Hole. Why? I think the interest rate cut is good for risk assets. Overnight reverse repo (RRP) pays a 5.3% interest rate, while there is no higher interest rate for any government bonds under 1 year. Money market funds (MMFs) will shift funds from government bonds to RRPs, which is negative for liquidity.
RRP has increased by $120 billion since Jackson Hole. I think this will continue as long as Treasury rates are lower than RRP.
Arthur Hayes offers his views on the reasons why the Federal Reserve's interest rate cut plan has fallen short of expectations
2024-09-02 10:46:41
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