Elizabeth Warren asks Bessent to justify Trump’s yen intervention

Senator Elizabeth Warren has pressed Treasury Secretary Scott Bessent to explain the Trump administration's justification for intervening in the yen. In a letter dated August 13, the senior Democrat on the Senate Banking Committee asked Bessent to detail how much taxpayer money was spent and to provide the legal analysis for using the Treasury's Exchange Stabilization Fund (ESF). Warren noted the administration has not officially disclosed the scale of the operation or the expected cost to US taxpayers.

Bessent confirmed the first US-Japan joint intervention to support the yen since 1998, which involved using euros from the ESF. The Treasury chief previously used ESF funds to intervene in the Argentine peso market, an action Warren described as a 'politically driven, taxpayer-backed bailout.' Warren also asked whether the Treasury consulted the European Central Bank, after reports said the ECB was only told after the fact. Bessent has said the US made money on its Argentina support but has not released specifics.

The yen had slid to 163.73 per dollar before the intervention, recovering to 157.57 by Friday. Livemint reports that Japan has been selling US government bonds to fund its own yen purchases, potentially pushing up US borrowing costs. Bessent wrote on X that the Treasury 'will not hesitate to participate in further joint intervention.' Warren has asked for a response by August 28.