Analysis: Federal Reserve may be pulled into Bessent’s effort to support Japan’s yen

Skip NavigationMarketsPre-MarketsU.S. MarketsCurrenciesPrediction MarketsCryptocurrencyFutures & CommoditiesBondsFunds & ETFsBusinessEconomyFinanceHealth & ScienceMediaReal EstateEnergyClimateTransportationInvestigationsIndustrialsRetailWealthSportsLifeSmall BusinessInvestingPersonal FinanceFintechFinancial AdvisorsOptions ActionETF StreetBuffett ArchiveEarningsTrader TalkTechCybersecurityAIEnterpriseInternetMediaMobileSocial MediaCNBC Disruptor 50Tech GuidePolitics & PolicyWhite HousePolicyDefenseCongressExpanding OpportunityVideoLatest VideoFull EpisodesLivestreamLive AudioLive TV ScheduleCNBC PodcastsCEO InterviewsCNBC DocumentariesDigital OriginalsWatchlistInvesting ClubTrust PortfolioAnalysisTrade AlertsMeeting VideosHomestretchJim's ColumnsEducationSubscribePROPro NewsJosh BrownMike SantoliCalls of the DayMy PortfolioLivestreamFull EpisodesStock ScreenerMarket ForecastOptions InvestingChart InvestingSubscribeLivestreamMenuMake ItselectUSAINTLLivestreamSearch quotes, news & videosLivestreamWatchlistSIGN INCreate free accountMarketsBusinessInvestingTechPolitics & PolicyVideoWatchlistInvesting ClubPROLivestreamMenu (function() { const userMembershipOnLastVisit = localStorage.getItem("cnbcMeta__cachedUserMembership"); if (!userMembershipOnLastVisit) { // If no user membership is stored, user is likely not logged in. // These users will typically see the banner. return; } const { isPro, isInvestingClubUser } = JSON.parse(userMembershipOnLastVisit); if (!(isPro || isInvestingClubUser)) { // We’re rendering the top banner for users who are not pro or investing club members. return; } // Hide the banner for pro and investing club users. const style = document.createElement("style"); style.id = "top-banner-placeholder-style"; style.innerHTML = "[data-top-banner-placeholder] { display: none; }"; document.head.appendChild(style); })() Politics & PolicyAnalysis: Federal Reserve may be pulled into Bessent’s effort to support Japan’s yenPublished Mon, Aug 3 20266:40 PM EDTUpdated 5 Hours AgoMatt Peterson@in/mattpetersonwritesWATCH LIVEKey PointsThe U.S. joined Japan in a rare foreign-exchange intervention to support the yen after the currency slid to 40-year lows.Bessent wants the Fed’s FIMA Repo Facility expanded so Japan can raise dollars without selling Treasurys outright.Selling Treasurys could push yields higher, adding pressure to U.S. borrowing costs.Any expansion would require Fed buy-in, testing Chairman Kevin Warsh’s effort to redefine Treasury-Fed cooperation.In this articleJPY=@TY.1Follow your favorite stocksCREATE FREE ACCOUNTFederal Reserve Chairman Kevin Warsh speaks during a news conference at Federal Reserve Headquarters in Washington on July 29, 2026.Win McNamee | Getty ImagesThe Federal Reserve may soon be drawn into the Trump administration's efforts to back the embattled currency of U.S. ally Japan. Treasury Secretary Scott Bessent wants the apolitical Fed to expand a lending facility that would enable Japan to support its currency without roiling the sensitive U.S. Treasurys market. That request comes as new Fed Chairman Kevin Warsh is seeking to rewrite the relationship between the Treasury and the Fed. How the two collaborate could have important consequences for the management of the $29 trillion Treasurys market and could see the Fed take on a new role backing U.S. financial diplomacy. It isn't clear how much support the chairman has within the Fed for major policy changes. The Fed declined to comment.The Treasury didn't respond to a request for comment about its plans. Read more CNBC politics coverageChatGPT dominates early AI spending in Congress as lawmakers weigh regulationTrump slams Pirro after she moves to drop Reflecting Pool vandalism caseAnalysis: Markets heard a dovish W