U.S. Treasury Secretary Scott Bessent announced this week a plan to at least double buybacks of longer-dated government securities, after initially indicating he would purchase between $5 billion and $10 billion in Japanese yen. BNP Paribas analysts remain skeptical, stating these measures will struggle to offset either declining Federal Reserve credibility or rising rate expectations. The Japanese yen has retreated to roughly its level at the start of the year, largely invalidating that intervention. Bessent claimed to possess « asymmetric information » and invited markets to wonder what he knows that they do not, while specifying that further Treasury actions will depend on market reaction. New Fed Chairman Kevin Warsh and Bessent maintain their weekly meeting tradition, although Warsh has emphasized the central bank must remain within its policy « lane ».
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