Arthur Hayes: In the current environment, rate hikes increase money supply, and financial assets will continue to rise.

BlockBeats news, September 17: Arthur Hayes posted on X platform that raising interest rates when government debt levels are high has a stimulative effect: bank reserve earnings increase, and the earnings of holders of short-term Treasury bonds also increase, which overall will drive more consumption, especially consumption of financial assets.

Hayes believes that although the Federal Reserve stopped RMP purchases in mid-August, if bank balance sheet expansion is included, the total assets of the Federal Reserve and banks are still growing and creating money. The overall combined effect is still an increase in the quantity of money, and even if interest rates rise, financial assets will continue to rise.