Dollar rally tells Trump Treasury that the ‘house’ is losing: McGeever
TLT•The dollar has risen 6% since the end of January after falling 10% last year, while long-dated Treasury yields reached their highest in 22 years. The rebound challenges the Trump administration’s currency and borrowing-cost goals and follows Treasury efforts to influence markets.
1. Dollar reverses course
The dollar, propelled by strong U.S. economic data, a hawkish Federal Reserve and rising bond yields, has rebounded 6% since the end of January after falling 10% last year. Further appreciation looks likely, and the rally has weakened the dollar-debasement narrative.
2. Treasury interventions tested
The Treasury acted with Japanese authorities in July to cool the dollar’s strength against the yen, and Treasury Secretary Scott Bessent later announced larger buybacks of long-duration debt, which observers viewed as an effort to lower yields. The yen has returned near 160 per dollar, described as the “intervention zone,” while long-dated Treasury yields are at a 22-year high.
3. Scale matters
The column argues that successful past interventions relied on overwhelming force, enormous scale and often multilateral action. It says the Treasury’s recent measures were intended to address pockets of illiquidity and volatility, but their limited size makes lasting effects unlikely.
