Bessent says US has strong dollar policy, ‘absolutely not’ intervening to support yen

The United States Treasury Secretary, Scott Bessent, reiterated the country’s strong dollar policy during a recent interview on CNBC. Bessent emphasized the importance of setting the right fundamentals to support the value of the dollar, denying allegations of U.S. intervention in currency markets to strengthen the Japanese yen.

When questioned about potential intervention to bolster the yen, Bessent firmly stated, “Absolutely not.” He further clarified that the U.S. maintains a strong dollar policy and does not engage in such actions. These comments from Bessent had a positive impact on the dollar’s performance, causing it to rise against a basket of currencies after hitting a four-year low.

The dollar index, which measures the strength of the U.S. currency against its counterparts, experienced a 0.5% increase, reaching 96.391. This rebound followed a recent dip to 95.86, the lowest level since February 2022. President Donald Trump’s remarks regarding the dollar’s value also influenced market sentiment, prompting a surge in selling ahead of the Federal Reserve policy decision.

Despite recent fluctuations, Bessent expressed confidence in the U.S. economy’s resilience, attributing its attractiveness to investors to Trump’s tax and deregulation policies. He emphasized that sound economic policies would attract investment and contribute to reducing trade deficits, ultimately strengthening the dollar over time.

Bessent’s optimistic outlook extended to the U.S. economic performance, dismissing concerns of inflation despite strong productivity and wage growth. He highlighted the potential impact of declining rents on measured inflation rates, suggesting that inflation may not necessarily follow improvements in economic indicators.

In conclusion, Bessent’s remarks underscore the U.S. commitment to a strong dollar policy and confidence in the economy’s prospects. As the government continues to implement sound policies, the dollar is expected to benefit from increased investor confidence and reduced trade deficits. These developments signal a positive outlook for the U.S. economy and its currency in the coming months.