Analysis: Federal Reserve may be pulled into Bessent’s effort to support Japan’s yen
Treasury Secretary Scott Bessent wants to defend the yen without selling Treasurys into a sensitive U.S. bond market. The Federal Reserve could help.
The Federal Reserve may soon be involved in the Trump administration's efforts to support Japan's embattled yen, according to a CNBC World report. Treasury Secretary Scott Bessent has requested the Fed to expand a lending facility that would enable Japan to support its currency without impacting the sensitive U.S. Treasurys market.
This request comes amid new Fed Chairman Kevin Warsh's efforts to redefine the relationship between the Treasury and the Fed. The move could have significant consequences for managing the $29 trillion Treasurys market and potentially see the Fed take on a new role backing U.S. financial diplomacy. However, it is unclear how much support the chairman has within the Fed for such major policy changes.
The U.S. last joined a broader effort to support Japan's yen in 2011 following a devastating earthquake and tsunami.
Brief written by urgent.news from CNBC World's own syndicated text. Machine-written — may contain errors; check the original before relying on it.
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- Bessent joins Japan to help reverse months of yen losses fortune.com
- Analysis: Federal Reserve may be pulled into Bessent’s effort to support Japan’s yen cnbc.com
- Bessent’s yen rescue to boost U.S. pressure on Japan trade, rates japantimes.co.jp
- A little-used Fed backstop is being put to a use it was never designed for—bankrolling Japan’s defense of the yen—and Treasury Secretary Scott Bessent wants it to be expanded wsj.com
