Treasury Secretary Bessent Criticizes Sen. Warren Over Foreign-Exchange Market Misundersth
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Treasury Secretary Scott Bessent unleashed a scathing personal attack on Sen. Elizabeth Warren Friday, accusing the Massachusetts Democrat of misunderstanding foreign-exchange markets while leaving several of her questions about a rare U.S. intervention in the Japanese yen unanswered.
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New York Post BusinessThe Post has sought comment from Warren. Treasury Secretary Scott Bessent mocked Sen. Elizabeth Warren’s grasp of foreign-exchange markets in a blistering response to her questions about the US intervention in the Japanese yen. REUTERS
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Bessent was responding to an Aug. 13 letter from Warren, seeking details about Treasury's decision to sell euros from its Exchange Stabilization Fund and purchase yen after the Japanese currency fell to a 40-year low.
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New York Post BusinessThe scathing letter came in response to an Aug. 13 missive from Warren demanding details about Treasury’s use of the Exchange Stabilization Fund, or ESF, as Washington joined Tokyo in buying yen after the currency plunged to a 40-year low.
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Warren, the ranking Democrat on the Senate Banking Committee, argued that American taxpayers could ultimately be on the hook if Japan proves unable to repay Treasury — a premise Bessent flatly rejected.
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CNBCWarren's opening paragraph incorrectly suggested, according to Bessent, that Japan owed money to Treasury, when the senator wrote that "American taxpayers would ultimately bear the cost if Japan were unable to repay" the department.
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"Treasury exchanged existing Exchange Stabilization Fund foreign-currency assets for yen," Bessent wrote in his response, dated Thursday. "No new congressional appropriation was involved, and no credit was extended to Japan. Japan owes Treasury nothing."
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New York Post Business“Treasury exchanged existing Exchange Stabilization Fund foreign-currency assets for yen,” he wrote.
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Bessent also defended the intervention as protecting US economic interests, pointing to Japan’s role as a major holder of US Treasuries as well as a key trading partner and treaty ally.
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CNBCBessent defended the intervention as necessary to protect U.S. economic interests, arguing that a disorderly yen could destabilize global markets and raise U.S. borrowing costs. However, his one-page response left several of Warren's questions unanswered.
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Most notably, Bessent did not disclose how much yen Treasury bought, the execution rate or the position's current value, even though a July 31 Reuters photo shows Bessent's notepad reading, "Buy Japanese Yen (JPY) $5-10 bil." He also did not say whether the European Central Bank was consulted before the euro sale or provide the detailed legal justification Warren requested.
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New York Post BusinessA Reuters photograph taken July 31 showed a notepad in front of Bessent bearing the words: “To Do Buy Japanese Yen (JPY) $5-10 bil.” The note appeared to indicate a contemplated purchase in that range but did not establish how much Treasury ultimately bought.
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The intervention marked the first coordinated U.S.-Japan effort to strengthen the yen since 1998. Japan spent 15.4 trillion yen, or about $96.5 billion, supporting its currency between July 30 and Aug. 26, a record for the period, according to Japanese Finance Ministry data released Friday.
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New York Post BusinessThe recent intervention in the yen marked the first coordinated US-Japan effort to strengthen the currency since 1998.
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The UAE branches of Egypt's Banque Misr are being newly sanctioned over their business dealings with Iran, cutting off the branches' access to US financial institutions and forbidding transactions in US dollar.
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Financial TimesUS Treasury imposes limits on Egyptian bank for doing business with Iran Measures targeting UAE branches of Banque Misr are part of Trump administration’s efforts to isolate Tehran
Washington Times BusinessThe new rule prohibits U.S. financial institutions from maintaining accounts for or on behalf of Banque Misr UAE. American banks are also required to take “reasonable steps” not to process accounts connected with the branch, according to Treasury’s website.
5 details only one outlet reported
Independent claims that didn't surface elsewhere in our corpus. Treat as supplementary — not corroborated across outlets.
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01 CNBC U.S. Treasury Secretary Scott Bessent faces a major test of his economic diplomacy skills this week as he presses finance leaders from the G20 major economies to shrink global trade imbalances, boost growth and sever business ties to Iran, while trying to calm worries about rising U.S. debt and bond yields.
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02 ZeroHedge "Treasury promised to sever every economic lifeline Tehran has left and finally end the threat of the Iranian regime," Treasury Secretary Scott Bessent said in a statement given to FT.
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03 New York Post Business Treasury, acting through the New York Fed, sold euros and bought yen as part of the effort, according to reports. The exact size of the US purchase has not been disclosed.
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04 Washington Times Business Reza Mohammad Taeedi, the regional bank manager for Bank Melli Dubai, was also targeted by sanctions under Treasury’s Office of Foreign Assets Control, according to the statement.
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05 RealClearMarkets Stephen S. Roach takes US Treasury Secretary Scott Bessent to task for pursuing ineffective currency and bond interventions. Read Full Article »
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Sources (6)
- ft
- cnbc
- nypost-biz
- rcmarkets
- zerohedge
- washtimes-biz