Bessent shows US will baulk at any dollar rebound
Engineering a tacit devaluation in a world of free-floating exchange rates is not easy, but undermining Fed independence and pressuring it to make interest rate cuts is one way to try
FOR anyone betting on a US dollar rebound, your biggest barrier is in Washington – and not just at the Federal Reserve.
Treasury Secretary Scott Bessent this week publicly prodded the Bank of Japan (BOJ) to keep raising interest rates, an extraordinary intervention that indicates how sensitive the current US administration is to any dollar rally.
Whether you agree with it or not, President Donald Trump’s administration has a clear worldview rooted in its ideas about “fair trade”, and the link between exchange rates and economic regeneration. A weaker dollar is clearly central to this weltanschauung.
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