Hayes’ Explosive ’Four, Seven’ Essay Maps Trump’s Fed Takeover Strategy

Arthur Hayes drops another intellectual bomb—this time targeting the Federal Reserve's very foundations.

The Blueprint Exposed

Hayes' latest essay dissects how Trump's administration could reshape monetary policy through strategic personnel appointments. Four key positions, seven potential scenarios—each more disruptive than the last.

Power Plays in Motion

The former BitMEX CEO outlines precisely how political influence could bypass traditional banking safeguards. Think regulatory capture but with blockchain-level transparency—ironic, given the Fed's opacity.

Market Implications

This isn't theoretical—Hayes connects the dots to real-world crypto volatility patterns. When central banks become political weapons, decentralized alternatives shine brighter than ever.

Another classic Hayes move—using financial commentary to expose how traditional institutions gamble with your money while pretending it's science.

The 1940s blueprint: Yield curve control then vs. now

Hayes began by drawing parallels with World War II, when the Treasury subsumed the Fed between 1942 and 1951. Back then, the Fed capped Treasury bill yields at 0.675% and long bonds (10–25 years) at 2.5%, producing a steep yield curve.

By contrast, today’s curve is flatter, with both short-term and long-term rates higher than wartime levels. Hayes argued that a steep curve favors regional banks, enabling them to profitably lend to small and medium enterprises (SMEs), which account for nearly 46% of U.S. employment. Under current conditions, however, credit is channeled toward large corporations via debt markets, sidelining Main Street.

Bessent’s Vision: Credit Creation for SMEs

According to Hayes, Buffalo Bill Bessent wants to shift credit power from the Fed and Wall Street institutions to regional banks. He frames this as elevating “Main Street over Wall Street.” Hayes cheekily dubs it “QE for Poor People.”

A steep yield curve, Hayes argues, WOULD revive SME lending, helping industries retool for what he suggests could be another cycle of U.S. military and industrial expansion, from “Baghdad to Caracas.” 

At the same time, fixing long-term yields would slash government interest costs, enabling unlimited Treasury issuance. The catch: the dollar would weaken, giving American exports an edge against China, Germany, and Japan.

How Trump could seize the Fed

The key obstacle, Hayes shared, is the Fed itself. To implement YCC, TRUMP would need loyalists on two boards:

• The Federal Reserve Board of Governors (FBOG) controls the Interest on Reserve Balances (IORB) and discount window rates.
• The Federal Open Market Committee (FOMC) controls the money printer, formally the System Open Market Account (SOMA).

Trump needs a four-seat majority on the FBOG, which would then allow him to influence FOMC membership through district bank presidents. With seven votes, he could control SOMA and lock in bond purchases.

Hayes pointed out that Trump is already halfway there. Governors Michelle Bowman and Christopher Waller dissented at the July 2025 FOMC meeting, siding with dovish policy. Adriana Kugler’s resignation, followed by the appointment of Stephen Miran, gave Trump a third ally. 

Hayes suggested that Governor Lisa Cook may be forced out over alleged mortgage irregularities, with the Department of Justice (DOJ) potentially pushing for an indictment. That would hand Trump his fourth vote.

The Fed politics at play

Once Trump commands the FBOG, Hayes argued, he can force the FOMC to comply by lowering IORB beneath Fed Funds, creating arbitrage opportunities for banks that would compel policy alignment. District Fed presidents up for re-election in 2025—from Cleveland, Minneapolis, Dallas, and Philadelphia—would also face pressure, since the FBOG must approve them.

By mid-2026, Hayes predicted Trump could cement control over both boards, setting the stage for a new “Treasury-Fed Accord” with full-blown money printing and yield curve control.

The Bitcoin Angle: $3.4 Million by 2028?

Hayes then shifts to the impact on markets. He estimates Treasury issuance of $15.32 trillion through 2028, with the Fed likely buying at least 50%. Add bank credit expansion, and he projects $15.229 trillion in new credit. 

Using COVID-era correlations, Hayes calculates Bitcoin could hit $3.4 million by 2028, though he tempers expectations, saying the real takeaway is directional: higher, much higher, than today’s $115,000.

Hayes’ Closing: “These Crackers Ain’t Playin’”

Framing this shift as another chapter in America’s historical pattern of drastic policy pivots under pressure, Hayes argues that Trump and Bessent are prepared to do whatever it takes to reindustrialize the U.S. For him, that means only one trade makes sense: being “long as f*** Bitcoin, shitcoins, Gold bullion, and miners.”

Also Read: bitcoin Will Break $200K, Four-Year Cycle Is Dead: Arthur Hayes