Bessent Tells Warren: Learn About FX
US Treasury Secretary Scott Bessent has responded to Sen. Elizabeth Warren's (D-Mass.) criticisms of the Treasury Department's recent use of the Exchange Stabilization Fund, saying she was 'wrong' about the transaction and offering her a tutorial on Foreign Exchange for Dummies.
In a letter to Warren, Bessent explained that no new congressional appropriation was involved in the transaction, and no credit was extended to Japan. The Treasury exchanged existing ESF foreign-currency assets for yen, which were used to stabilize the currency after it dipped to a 40-year low.
Warren had questioned Bessent's authority on the transaction, citing Section 5302 of the statute that gives the secretary with presidential approval the authority 'to deal in foreign exchange in support of orderly exchange arrangements.' Bessent responded by saying, 'Treasury's legal analysis begins with reading the statute. I recommend you try the same.'
The Exchange Stabilization Fund has not been used since 1998.