Arthur Hayes Claims New Fed Liquidity Tool “RMP” Conceals Money Printing

In a recent essay published on Substack, Arthur Hayes, the co-founder and former CEO of the cryptocurrency exchange BitMEX, expressed his view that the Federal Reserve's newly introduced program for "reserve management purchases" (RMP) is essentially a rebranded version of quantitative easing.

Key Takeaways

Arthur Hayes believes that the Federal Reserve's new RMP program resembles quantitative easing.
The program involves the Fed purchasing short-term Treasury bills while aiming to enhance liquidity without the stigma of traditional money printing.
Hayes argues that this increases fiat liquidity and benefits assets like Bitcoin, gold, and silver, but simultaneously harms those without assets by diminishing their purchasing power.
The Fed recently cut interest rates and announced purchases of short-term Treasury securities, which may impact Bitcoin's future price movements.

Hayes contends that by engaging in the purchase of short-term Treasury bills and circulating liquidity through money markets, the Fed is financing government expenditures while dodging the political fallout associated with quantitative easing. Instead, officials are presenting the RMP as a technical operation focused on liquidity.

Federal Reserve, US Government, United States, Arthur Hayes, Donald Trump, Polymarket
US Treasury issuance by maturity. Source: MacroMicro

According to Hayes, mechanisms like the RMP contribute to an increase in fiat liquidity which, in his perspective, benefits scarce assets such as Bitcoin, gold, and silver. He cautions, however, that individuals without assets suffer as the excessive money creation erodes their purchasing power, diminishes wages compared to prices, and shifts wealth towards those who hold assets.

“Unfortunately, in the here and now for most of humanity, money printing destroys their dignity as productive humans,” Hayes wrote. “When the government intentionally debases the currency, it disrupts the meaningful connection between energy inputs and economic outputs.”

Related: Bitcoin rebounds on Japan rate hike as Arthur Hayes sees dollar at 200 yen

Arthur Hayes argues new Fed liquidity tool “RMP” masks renewed money printing

Impact of the Recent Federal Reserve Actions

On December 10, the Federal Open Market Committee (FOMC) lowered interest rates by 25 basis points and disclosed plans to purchase short-term Treasury securities. Fed Chair Jerome Powell characterized this action as necessary to ensure a sufficient supply of reserves, claiming it is distinct from the overall monetary policy stance.

The Federal Reserve indicated that these purchases would start at approximately $40 billion in the first month and could remain high for several months to alleviate immediate pressures in money markets, particularly during seasonal events like tax payments.

Despite the rate cut and the announcement regarding Treasury purchases, market analysts believe that mixed signals from Powell could stifle any sustained recovery in Bitcoin prices until the Fed resumes its rate-reducing cycle in 2026. On December 10, Bitcoin was priced at roughly $92,695, but it was trading around $87,300 as of the last update.

At that time, Polymarket traders were predicting no change to the Fed's policy in January, estimating a 77% chance that rates would remain the same, with a 21% likelihood of a further 25 basis point cut, while any significant changes in interest rates were deemed highly unlikely.

Odds of Fed rate cut in January. Source: Polymarket

Powell's term is due to end in May 2026. Meanwhile, U.S. President Donald Trump is preparing to interview candidates to potentially replace him; National Economic Council Director Kevin Hassett is currently viewed as the leading contender.

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