Liquidity is drying up Arthur Hayes warns Fed must act now

- Arthur Hayes, “The Fed is on the clock, shit is breaking down” - Stock market decline, 10-year Treasury yield drop = signs of recession and liquidity crunch [Unblock Media] April 9, 2025 — Arthur Hayes, the former CEO of BitMEX and a cryptocurrency analyst, recently warned in a tweet that structural risks are spreading throughout the financial market. He stated, "The Fed is on the clock, shit is breaking down," highlighting the need for Federal Reserve intervention. Hayes explained that unlike in the past when stock market declines and drops in the 10-year Treasury yield were interpreted as signs of easing inflation, these same indicators are now considered signs of recession and liquidity crunch. He emphasized that investor sentiment has shifted negatively, using the expression "Stocks down, 10-yr yield down, good! (prev) / bad! (now)." Particularly, Hayes pointed out that "Mrkt finally realized that if there are fewer export dollar earnings, there cannot be treasury buying or stock buying. Game Over," indicating that the decrease in dollar revenue from global export companies is limiting the demand for U.S. Treasury and stock investments. This is linked to structural changes such as the slowdown in growth in major export markets like China and Europe, reconfiguration of supply chains, and continued dollar strength, leading to reduced dollar inflows. Consequently, the liquidity base of asset markets is weakening, and market participants are closely monitoring the timing of Federal Reserve intervention. Hayes's expression "Game Over" suggests that a significant transition in the global liquidity cycle has begun. Experts believe there is likely to be increased market volatility centered around Federal Reserve policy responses, international capital flows, and preferences for safe-haven assets in the near future.