In a provocative analysis, BitMEX co-founder Arthur Hayes envisions a dramatic shift in U.S. monetary policy under a potential second term for Donald Trump. Hayes contends that the new administration would endeavor to exert control over the Federal Reserve by appointing political loyalists to the Board of Governors, fundamentally altering the central bank’s operations and policies.
In his essay titled “Four, Seven,” released on September 23, Hayes outlines that such a strategic overhaul is aimed at promoting re-industrialization and managing the national debt. By assembling a board favoring the administration, Trump’s team could challenge the Federal Reserve’s traditional independence, thereby consolidating power over the nation’s monetary policy.
Hayes argues that, by early 2026, the Trump administration could achieve a voting majority on the Board of Governors through targeted appointments and expected resignations. This newfound authority would extend to influencing the selection of regional Fed bank presidents, effectively establishing a strong voting bloc on the Federal Open Market Committee (FOMC). This scenario could allow the White House unprecedented control over the money supply.
Central to this proposed policy shift is the introduction of Yield Curve Control (YCC), which would involve capping interest rates to support government-funded economic initiatives. Hayes likens this approach to strategies employed during World War II, emphasizing a focus on lending aimed at small and medium enterprises (SMEs)—which are pivotal to the U.S. workforce—rather than delivering benefits primarily to large corporations, as seen in the quantitative easing measures after the 2008 financial crisis. He dubs this new framework “QE 4 Poor People” to reflect its commitment to “Main Street” economic boosts.
This reimagined fiscal policy could entail an expansive credit expansion exceeding $15 trillion by 2028, raising concerns about significant dollar debasement. Hayes predicts that such an environment would prompt investors to flock to hard assets with limited supply, particularly Bitcoin, as a safeguard against inflation and currency devaluation. He notes that billionaire investors like Ray Dalio have voiced similar concerns regarding rising U.S. debt levels.
Drawing from pandemic-era credit growth models, Hayes speculates that Bitcoin’s price could soar to $3.4 million by 2028. Although he acknowledges the speculative nature of this figure, he emphasizes his strong belief in Bitcoin’s long-term trajectory amid potential monetary upheavals.
However, Hayes’s predictions remain contentious, particularly regarding the potential undermining of the Federal Reserve’s independence. Any attempt to alter the structure of the central bank would likely incite significant political and legal challenges, fueling ongoing discussions among economists and analysts about the implications of such a shift.
