The dollar has rebounded 6% since January after falling 10% last year, while long-dated Treasury yields reached a 22-year high. The rally challenges Treasury Secretary Scott Bessent’s efforts to curb the dollar’s strength against the yen and lower borrowing costs.
The dollar has gained 6% since the end of January, when it was at a four-year low, after falling 10% last year. Strong US economic data, a hawkish Federal Reserve and rising bond yields have fueled the rally, which has weakened the “dollar debasement” narrative.
The Treasury acted alongside Japanese authorities in late July to cool the dollar’s strength against the yen. Bessent later announced larger buybacks of long-duration debt, which market observers viewed as an effort to lower yields. The yen has returned near 160 per dollar, while long-dated Treasury yields are at their highest in 22 years.
The column says past successful government interventions in currency and bond markets relied on overwhelming force, large scale and often multilateral action. It contrasts those efforts with the Treasury’s smaller moves, which Bessent has described as aimed at pockets of illiquidity and unwanted volatility.
