Bessent attacks Warren over yen intervention, offers ‘FX for Dummies’

Treasury Secretary Scott Bessent unleashed a scathing personal attack on Sen. Elizabeth Warren Friday, accusing the Massachusetts Democrat of misunderstanding foreign exchange markets while leaving several of her questions about a rare U.S. intervention in the Japanese yen unanswered.

“In her latest sciolistic letter to me, @SenWarren made it clear that she knows even less about foreign exchange markets than she does about banking,” Bessent wrote on X about the top Democrat on the Senate banking committee. He offered Warren and her staff a tutorial on “Foreign Exchange for Dummies” and accused the news media of failing to identify what he called her “remedial error.”

Warren fired back by pointing to a string of recent setbacks for the Treasury secretary.

“Tough couple weeks for Sec. Bessent,” Warren wrote on X Friday. “His effort to prop up a foreign currency hasn’t worked. His failed intervention in Treasury markets was blasted by his mentor as burning ‘two centuries’ of credibility. Trump’s economy is crushing families. Maybe he should focus on that.”

Bessent was responding to an Aug. 13 letter from Warren, seeking details about Treasury’s decision to sell euros from its Exchange Stabilization Fund and purchase yen after the Japanese currency fell to a 40-year low.

Warren’s opening paragraph incorrectly suggested, according to Bessent, that Japan owed money to Treasury, when the senator wrote that “American taxpayers would ultimately bear the cost if Japan were unable to repay” the department.

“Treasury exchanged existing Exchange Stabilization Fund foreign-currency assets for yen,” Bessent wrote in his response, dated Thursday. “No new congressional appropriation was involved, and no credit was extended to Japan. Japan owes Treasury nothing.”

Despite the opening phrasing, Warren’s letter later correctly described the intervention as a sale of euros for yen, explicitly noting that Japan had not borrowed from the Treasury or the Federal Reserve.

Bessent defended the intervention as necessary to protect U.S. economic interests, arguing that a disorderly yen could destabilize global markets and raise U.S. borrowing costs. However, his one-page response left several of Warren’s questions unanswered. 

Most notably, Bessent did not disclose how much yen Treasury bought, the execution rate or the position’s current value, even though a July 31 Reuters photo shows Bessent’s notepad reading, “Buy Japanese Yen (JPY) $5-10 bil.” He also did not say whether the European Central Bank was consulted before the euro sale or provide the detailed legal justification Warren requested.

The intervention marked the first coordinated U.S.-Japan effort to strengthen the yen since 1998. Japan spent 15.4 trillion yen, or about $96.5 billion, supporting its currency between July 30 and Aug. 26, a record for the period, according to Japanese Finance Ministry data released Friday.

Rather than dwelling on “petty grievances with Senator Warren,” Bessent “should focus … on reducing the cost of living for the American families struggling in President Trump’s economy,” Senate banking committee Democratic spokeswoman Saloni Sharma said in a statement.

The Treasury Department did not immediately respond to a request for comment.