Treasury Secretary Scott Bessent and Sen. Elizabeth Warren (D-Mass.) have turned a dispute over the Donald Trump administration's intervention in the Japanese yen into a sharp clash.
Bessent and Warren Trade Barbs Over Yen Intervention: 'She Knows Even Less About Forex Than Banking'
MarketDash
Treasury Secretary Scott Bessent and Senator Elizabeth Warren clashed over the yen intervention, trading barbs over its effectiveness and Treasury's transparency.
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Bessent Slams Warren Over Yen Intervention
On Friday, Bessent escalated the dispute after Warren pressed him for details about the U.S. intervention to support the yen.
"In her latest sciolistic letter to me, @SenWarren made it clear that she knows even less about foreign exchange markets than she does about banking," Bessent wrote on X, referring to Warren's Aug. 13 letter.
Bessent also suggested Warren and her staff take an introductory course in international finance, offering to provide a "Foreign Exchange for Dummies" tutorial.
At issue is Treasury's use of its Exchange Stabilization Fund to sell euros and purchase yen after the Japanese currency plunged to a 40-year low. Warren had argued that U.S. taxpayers could ultimately bear the cost if Japan failed to repay Treasury.
Bessent Says Japan Owes Treasury Nothing
Bessent rejected that characterization, saying Treasury simply exchanged foreign-currency assets it already held for yen.
"No new congressional appropriation was involved, and no credit was extended to Japan. Japan owes Treasury nothing," Bessent wrote in a response on Thursday.
He argued the intervention was necessary because disorder in Japanese currency markets could spill into global markets and potentially increase U.S. borrowing costs.
However, Treasury has not disclosed the amount of yen purchased, the execution rate or the current value of the position. A Reuters photograph of Bessent's notes showed a target of "$5-10 bil." in Japanese yen, but Treasury has not confirmed that figure.
Elizabeth Warren Fires Back at Bessent
"Tough couple weeks for Sec. Bessent," Warren wrote on X sharing Bessent's post. "His effort to prop up a foreign currency hasn't worked."
She also pointed to criticism of Bessent's Treasury-market policies and argued that the administration should focus on economic pressures facing American households.
The U.S. intervention marked a rare move in currency markets, with the Treasury last directly intervening to support the yen in 1998.
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