TLDR
- Scott Bessent reaffirmed a strong dollar stance despite Trump praising the currency’s recent drop.
- Bessent said Trump’s economic policies create a strong backdrop for the U.S. dollar.
- The dollar rose after Bessent denied any active weakening against the yen by the Treasury.
- Bessent clarified a joke about suing Fed nominee Warsh, citing respect for the Fed’s independence.
U.S. Treasury Secretary Scott Bessent pushed back on suggestions that he and President Donald Trump differ on the dollar’s value, saying it’s a “false choice” to frame their positions as conflicting. His remarks come after Trump praised a weaker dollar, while Bessent reaffirmed support for a long-standing strong dollar policy.
Mixed Signals on Dollar Value Addressed
Treasury Secretary Scott Bessent rejected claims that he and President Donald Trump hold opposing views on the U.S. dollar. Speaking in an interview with CNBC, Bessent said, “That’s a false choice,” when asked if there was a contradiction between his support for a strong dollar and Trump’s recent comments welcoming its decline.
On January 27, Trump told reporters he was not concerned about the dollar’s recent slide, saying, “No, I think it’s great.” The next day, Bessent stated that the United States has “always had a strong dollar policy,” pushing back against market speculation of any active effort to weaken the currency, especially against the Japanese yen.
Following Bessent’s remarks, the dollar climbed. This contrasted with the drop triggered by Trump’s earlier comments. The back-to-back statements led to public debate over the administration’s actual stance.
Strong Dollar Backdrop Framed Around Policy
Bessent explained that a strong dollar policy is not solely defined by verbal support, but also by structural measures. He pointed to the Trump administration’s approach to tax policy, trade, deregulation, and energy production.
These factors, he said, help make the United States a strong destination for global capital. “Are we making the U.S. the best place for capital in the world? And I think no one’s done that better than President Trump,” Bessent said during the interview.
He also mentioned the administration’s focus on “reasserting our sovereignty in critical minerals” as part of a broader economic strategy. While Trump did not address Bessent’s comments directly, the Treasury chief’s remarks were viewed as an effort to align both positions under a unified policy direction.
Fed Remarks Revisited After Senate Exchange
Bessent also addressed another issue during his CNBC appearance, following a tense exchange at a Senate Banking Committee hearing. Democratic Senator Elizabeth Warren had questioned him about a reported comment by Trump expressing interest in suing Kevin Warsh, his nominee for Federal Reserve Chair, if Warsh refused to cut interest rates.
At the hearing, Bessent said, “That is up to the president,” which caused immediate controversy. The next day, he said the remark was meant as a joke and criticized Senator Warren for lacking “a sense of humor.” He did not repeat the phrase “up to the president” during the television interview.
Instead, Bessent emphasized that Trump respects the Federal Reserve and its independence, suggesting no plans for political interference with monetary policy decisions. The statement appeared designed to ease market concerns about central bank autonomy under a possible second Trump administration.
Warren Raises Alarm Over Central Bank Pressure
Senator Warren raised concerns that Trump has tried to influence the Federal Reserve, citing past reports about pressure on Jerome Powell and current Governor Lisa Cook. She said the attempt to appoint Warsh could lead to a more politically influenced central bank.
“This is a takeover,” Warren warned during the hearing, referring to Trump’s reported desire to install a Fed chair who would lower interest rates on demand.
While Bessent dismissed those fears, the exchange raised broader questions about how Trump’s approach to monetary policy might differ from past presidents, who have traditionally avoided pressuring the Fed.
