“Take Any Entry-Level Course”: Treasury Secretary Bessent Clashes With Elizabeth Warren Over Yen Operation
photo of the fauxcahontas Senator Warren
the staff of the Ridgewood blog
Washington DC, A sharp public feud has erupted between U.S. Treasury Secretary Scott Bessent and Democratic Massachusetts Senator Elizabeth Warren over Washington’s rare intervention in the foreign exchange market to support the Japanese yen.
In an official response letter, Bessent dismissed concerns raised by Warren regarding potential risks to American taxpayers, suggesting that the senator and her staff take an “entry level course in international finance.”
The exchange highlights growing congressional scrutiny over how the U.S. Treasury utilizes its emergency reserve funds during international currency volatility.
The Core Clash: Did U.S. Taxpayer Exposure Increase?
The controversy stems from an August 13 letter sent by Sen. Elizabeth Warren warning that “American taxpayers would ultimately bear the cost if Japan were unable to repay the Department of the Treasury.”
Bessent firmly rejected the premise, clarifying that no credit or loan was extended to Tokyo during the joint currency operation:
“No new congressional appropriation was involved, and no credit was extended to Japan. Japan owes Treasury nothing,” Bessent wrote. “There is therefore no risk that Japan will fail to repay a debt that does not exist.”
Bessent pointed directly to Section 5302 of Title 31, noting that the Exchange Stabilization Fund (ESF) expressly authorizes the Treasury Secretary, with presidential approval, to trade foreign exchange reserves to maintain orderly market conditions.
Forex Mechanics: Euros Sold for Yen
According to analysis by the Council on Foreign Relations (CFR) and Treasury balance sheet reports, the Treasury funded its currency intervention by trading assets it already held—selling euros to purchase yen—rather than deploying new U.S. dollar appropriations.
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40-Year Lows: The intervention followed the Japanese yen dropping to historic lows near 164 per dollar.
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Historical Context: Prior to this operation, Washington last directly intervened to support the Japanese yen in 1998.
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Position Details: While Japan’s Ministry of Finance disclosed a total intervention effort of nearly $97 billion across late July and August, the U.S. Treasury has not officially released the exact execution rate or size of its specific yen position.
Escalating Social Media Feud & Policy Debate
Following the formal letter, Bessent took to social media to criticize both the senator’s critique and news coverage of the foreign exchange mechanics, labeling the pushback as “sciolistic.”
“[N]ot a single member of the media mob has a rudimentary-enough level of financial market literacy to spot her remedial error,” Bessent posted on X.
Warren responded swiftly, arguing that the administration’s actions failed to provide lasting stability to foreign exchange rates while broader economic policies continue to put pressure on working families.
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Tags Treasury Department Scott Bessent Elizabeth Warren US Politics Global Economy Finance News Japanese Yen Forex
