Becent US Treasury: "Trump's Strong Dollar Policy... Powell Will Do the Right Thing"

Scott Bessent Interview with Bloomberg
"We Want a Strong Dollar... No Currency Manipulation by Other Countries"
No Criticism of the Fed... "Will Lower 10-Year Treasury Yield"

Scott Bessent, U.S. Treasury Secretary, stated that the 'strong dollar' policy will be maintained in the second Trump administration. However, he expressed that artificial currency devaluation or trade manipulation by other countries is not desired. Regarding Jerome Powell, Chairman of the U.S. Federal Reserve (Fed), he showed trust by saying, "He will do the right thing."

In an interview with Bloomberg on the 6th (local time), Secretary Bessent said, "The strong dollar policy is fully maintained under President Trump," adding, "We want the dollar to be strong."

However, he pointed out that the free trade system is not functioning properly as several countries achieve large trade surpluses. While this may be due to exchange rates, he also considered that some countries artificially lowering interest rates could be a cause.

The market has expected President Trump to lower the dollar's value to resolve the trade deficit. There has also been speculation about a second Plaza Accord, the so-called 'Mar-a-Lago Agreement,' which would artificially reduce the dollar's value. Contrary to these market expectations, Secretary Bessent suggested that the second Trump administration will pursue a strong dollar stance.

Secretary Bessent explained, "We want fair trade," adding, "As part of that, we take a strong position on currency and trade conditions." This implies that they are not pursuing a weak dollar but will strongly respond to currency manipulation countries that artificially lower their currency values.

Regarding Chairman Powell, who has shown a critical stance including proposing the idea of a 'shadow Fed chairman,' Bessent expressed trust by saying, "He will do the right thing."

Secretary Bessent emphasized, "Everything I talk about concerns what the Fed has done in the past," and added, "I will not comment on future monetary policy. Nor do I have any criticism."

While avoiding comments on monetary policy, he revealed that the government is focusing on policies to lower the yield on 10-year U.S. Treasury bonds. He also reiterated the view that the 10-year U.S. Treasury yield will decline during the second Trump administration.

Earlier, when President Trump expressed dissatisfaction with the Fed's high interest rate policy during his presidential campaign, Bessent, who was part of his staff, proposed the idea of a shadow Fed chairman last year. The plan was to nominate the next Fed chairman before Powell's term expires in May 2026, effectively neutralizing the market impact of Powell's statements.