Arthur Hayes Says Fed May Print Money Amid Expanding Iran War

TLDR

• Arthur Hayes links past US wars to Fed rate cuts and money supply growth.
• He says a prolonged Iran conflict may push the Fed to ease policy.
• Bitcoin traded near $66,200, down about 30% year over year.
• Hayes advises waiting for an actual Fed rate cut before buying.

US military action against Iran could prompt the Federal Reserve to print money, according to BitMEX co-founder Arthur Hayes. He argues that extended conflict may lead to rate cuts and liquidity measures. Hayes believes such steps could support Bitcoin and other digital assets over time.

In a recent essay, Hayes said every major US military campaign in the Middle East since 1985 was followed by monetary easing. He stated that the Fed could again lower rates if spending rises due to conflict with Iran.

History of War and Fed Policy

Arthur Hayes reviewed earlier conflicts to support his argument. He referred to the 1990 Gulf War under President George H.W. Bush. The Fed first kept rates unchanged but later cut them in November and December 1990. An August 21, 1990 FOMC statement cited heightened uncertainty from Middle East events that complicated monetary policy decisions. 

Rates were cut even as oil prices pushed inflation higher. Hayes also pointed to the response after the September 11 attacks in 2001. Then Fed Chair Alan Greenspan announced an emergency 50 basis point rate cut. 

Greenspan said, “The events of last week have created a heightened degree of fear and uncertainty.” The wars in Iraq and Afghanistan followed, and the easing cycle continued. During President Barack Obama’s 2009 troop surge in Afghanistan, rates were already near zero. Quantitative easing was also in place. Hayes noted that monetary policy was already loose, so further cuts were not possible.

Current Iran Tensions and Policy Outlook

Turning to the present, Hayes discussed rising tensions between the United States and Iran. Over the weekend, Israel and the US launched airstrikes on Iran. Reports said the strikes killed Iran’s Supreme Leader, Ali Khamenei. President Donald Trump pledged to continue operations.

Hayes wrote, “The longer Trump engages in the extremely costly activity of Iranian nation-building, the higher the likelihood that the Fed lowers the price and increases the quantity of money.” He argued that Iranian regime change has been a goal of US policymakers since 1979.

He added that political support for such action could give the Fed room to ease policy. Increased federal spending on defense and veterans could also raise fiscal pressure. Hayes included data showing Veterans Affairs spending has grown faster than overall federal spending since 1985.

Bitcoin Price and Trading Strategy

Bitcoin was trading near $66,200 at the time of writing. The asset is down nearly 30% over the past year. It also remains about 47% below its October 2025 peak of $126,000. The Crypto Fear and Greed Index shows extreme fear conditions. Despite his long-term outlook, Hayes urged caution. He wrote, “The prudent action is to wait and see.” 

He said investors should wait for actual rate cuts or new money printing before increasing exposure. Hayes suggested that buying Bitcoin and selected altcoins could make sense after the Fed shifts policy. He maintained that Fed easing linked to a US conflict with Iran could support crypto markets. Market reaction so far has been limited. US stock futures opened slightly lower. 

Oil prices gave back part of their early gains. Social media mentions of “World War 3” increased, but remained below previous peaks in 2025. Hayes has also recently discussed other possible reasons for future easing. These include new liquidity tools and stress in global bond markets. However, his latest essay focuses on the view that the Fed could print money to support US conflict with Iran.

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