- This comes after interest rate cuts announced this week by the Bank of Canada and ECB.
- The next negative interest rate surprise might come at the BoE meeting as per Hayes.
The crypto bull market is “reawakening” according to Arthur Hayes, the former CEO and co-founder of BitMEX who now runs Maelstrom. This comes after interest rate cuts announced this week by the Bank of Canada and the European Central Bank.
The Bank of Canada dropped interest rates by quarter of a point to 4.75% on Wednesday, making it the first major central bank to do so this year. Rates were dropped by the same amount, to 4.25%, by the European Central Bank yesterday.
All Eyes on Fed
Hayes said he was hoping for a major announcement on economic policy at the U.S. Federal Reserve’s Jackson Hole Symposium in August. The following events in the economic calendar are the G7 Leaders’ Summit in Apulia, Italy, on June 13–14, and the Federal Open Market Committee meeting on June 11–12.
According to Hayes, the main concern is whether the Federal Reserve would begin reducing interest rates so close to the US presidential election in November. But Hayes said the Fed usually doesn’t shift course so near to an election and that, given ongoing worries about inflation, it would be “political suicide” to lower interest rates in the US right now. He added that, in his base case scenario, the Fed will keep rates at their next meeting.
After the G7, Hayes predicts no action from the Bank of Japan, but he speculates that, after the cuts by the Bank of Canada and the European Central Bank, the next negative interest rate surprise might come at the Bank of England meeting.
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