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Treasury Secretary Scott Bessent seeks Fed backstop expansion
Treasury Secretary Scott Bessent is pressing the Federal Reserve to broaden its dollar swap backstop, aiming to stabilize Japan’s weakening currency and ease strains in global funding markets. Japan’s yen has faced persistent downward pressure as interest rate differentials with the United States remain wide, pushing investors toward higher-yielding dollar assets and increasing volatility in cross-border capital flows. Expanding the Fed facility could provide Japanese authorities more flexibility to intervene in currency markets, reassure investors about dollar liquidity, and potentially reduce the risk of disorderly moves reverberating across international financial systems.
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