MarketsOpinion
|6 min ReadArthur Hayes: The Fed is Lying to You
Maya Chen
Senior Analyst
Published
Jan 16, 2026
Arthur Hayes has found a new "Love Language." It is a list of boring acronyms used by politicians to hide the fact that they are printing money to pay their debts. On December 10, the Fed launched "RMP" or Reserve Management Purchases. To most people, this sounds like technical bank plumbing. To Hayes, it is the sound of a machine that never stops. He argues that RMP is just a sneaky way to do Quantitative Easing (QE) without scaring the public. While the "plebes" feel the pain of rising prices, the elites use these terms to keep the game going.
The stakes are clear for anyone holding cash. Since the 2009 lows, Bitcoin and risky assets have escaped the deflationary grave to post insane returns. If you want to be rich in the age of money printing, you must own financial assets. Bitcoin is so far ahead of traditional hedges that it deserves its own category. The goal is simple. You take your salary and you convert it into more assets before the currency loses its value entirely.
The Hidden Plumbing of the New Fed Money Printer
The Fed wants you to believe that RMP is different from QE. In the old QE model, the Fed bought long-term bonds from banks like JPMorgan. They created money out of thin air and gave it to the banks as reserves. This money only helped the economy when banks bought more bonds or the government spent the cash on grants and handouts. This created a direct path for inflation to enter the real world.
The new RMP system is just as dangerous. Instead of bonds, the Fed buys short-term T-bills from money market funds like Vanguard. They pay for these bills with "Reverse Repo" balances. This frees up the money market funds to lend cash to hedge funds. These funds then buy even more government debt. The Fed is essentially cashing the government’s checks by proxy. This creates a circle of debt that fuels a Value Collapse of the US dollar.
The government is now addicted to this short-term funding. They must issue five hundred billion dollars in T-bills every single week just to keep the lights on. This is a massive "Sovereign Stack" of debt that cannot be ignored. The Fed is forced to keep the printer running to ensure the market does not seize up. This means "ample reserves" will always be maintained. The street is currently underestimating how much liquidity this will inject into the system by early 2026.
Using RMP to Pump the US Housing Market
The Trump administration has a clever plan to win over voters. Treasury Secretary Scott Bessent wants to use the RMP funds to juice the housing market. By using the money from T-bill sales to buy back older bonds, the Treasury can force long-term interest rates down. This is a "Macro Pivot" disguised as a housing program. Lower bond yields mean lower mortgage rates for the sixty-five percent of Americans who own homes.
This will trigger a massive wave of refinancing. Homeowners will pull cash out of their houses to buy more goods and services. This fuels consumption and keeps the political party in power. It is a brilliant way to buy support with printed money. If Bessent can lower mortgage rates by 2026, he will save the Republican majority in the legislature. The downside is that this "Liquidity Trap" only works as long as the rest of the world accepts a falling US dollar.
The four-year Bitcoin cycle is effectively dead. We are moving into a world of permanent "Up Only" for hard assets. As the Fed prints, other central banks like the BOJ and ECB will be forced to follow. No one wants their currency to rise too fast against the dollar. This creates a global race to the bottom. In early 2026, we expect the Fed to slam the printer into high gear. Bitcoin will likely chop between eighty thousand and one hundred thousand for a short time before punching toward two hundred thousand.
While the "shitcoins" are sick from recent wipeouts, the basis trade is about to explode. Hayes is looking for gems like Ethena ($ENA). As the quantity of cash grows, the demand for leverage will shoot up. This makes synthetic dollars like USDe incredibly profitable. This is the pure play for the 2026 rates market. The era of fiat is ending. Those who husbanded their capital and own hard assets are about to enter a new dimension of wealth.
Disclaimer: This document is intended for informational and entertainment purposes only. The views expressed in this document are not, and should not be taken as, investment advice or recommendations. Recipients should do their own due diligence, taking into account their specific financial circumstances, investment objectives and risk tolerance, which are not considered here, before investing. This document is not an offer, or the solicitation of an offer, to buy or sell any of the assets mentioned.