Bessent blasts Warren’s ‘sciolistic’ letter about yen policy
Treasury Secretary Scott Bessent publicly opposed Senator Elizabeth Warren’s critique of the U.S. government’s currency intervention with Japan aimed at supporting the yen, which had hit a 40-year low. Warren had questioned the governance’s use of the Exchange Stabilization Fund (ESF) too purchase yen, demanding openness about the funds used and the transaction details. Bessent responded by defending the intervention,clarifying that no new funds or debts were involved and that Japan owed nothing to the U.S. government. He criticized Warren’s understanding of foreign exchange markets and emphasized the importance of oversight based on facts, warning that instability in yen markets could negatively impact global markets and U.S. borrowing costs.Warren dismissed Bessent’s arguments,suggesting he lacks sufficient knowledge about currency markets and criticized his involvement in other international issues. The exchange highlighted ongoing disagreements over U.S. foreign currency policies and fiscal management.
Treasury Secretary Scott Bessent rebuked Sen. Elizabeth Warren (D-MA) on Friday over a weekslong disagreement over the Treasury Department’s decision to execute a joint currency intervention with Japan to support the weakening yen after the currency dropped to a 40-year low at the beginning of August.
Warren sent a personal letter to Bessent on Aug. 14 to press “for more information regarding the Trump administration’s decision to deploy its Exchange Stabilization Fund (ESF) to boost financial markets and inflate the Japanese yen.” The ranking member of the Senate Banking, Housing, and Urban Affairs Committee, Warren also said then the Trump administration “has yet to provide a detailed justification for its intervention, nor has it officially disclosed how much taxpayer-linked funds were spent purchasing yen.”
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Bessent finally responded on Friday, saying the Massachusetts Democrat “made it clear that she knows even less about foreign exchange markets than she does about banking” before saying the opening paragraph of her letter “is wrong about where the money came, what the transaction was, and whether there was even a borrower.”
“Treasury exchanged Existing Stabilization Fund foreign-currency assets for yen. No new congressional appropriation was involved, and no new credit was extended to Japan,” Bessent further explained. “Japan owes Treasury nothing. There is therefore no risk that Japan will fail to repay a debt that does not exist.”
Warren said it’s been a “tough couple weeks for Sec. Bessent” in response, referencing his recent increased involvement in the conflict in Iran. “His effort to prop up a foreign currency hasn’t worked. His failed intervention in Treasury markets was blasted by his mentor as burning ‘two centuries’ of credibility.”
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Bessent also told Warren that “disorderly yen markets” could harm global markets and ultimately raise borrowing costs for Americans, and compared the decision to a similar intervention with Argentina last year.
“The American people deserve oversight grounded in facts rather than slogans,” the letter ended. “Although I am not holding my breath, I hope your next letter will demonstrate that you have learned the difference between a currency purchase and a swap or a loan.”
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