Source: Jinshi Data

U.S. Treasury Secretary Scott Bessent said that under Trump's leadership, the United States will continue to implement a "strong dollar."

Bester said in an interview Thursday: "President Trump has not changed the strong dollar at all. We want the dollar to strengthen. We don't want to see other currencies that weaken them, manipulate their trade. ”

Bester said that because many "has accumulated a large amount of surplus, there is no free form of trading system." He said part of the reason could be the exchange rate, and "interest rate suppression" could also be a factor in some places, but he did not point out specifics.

Bloomberg's dollar spot index was barely changed when Becente spoke, then fell to its lowest level of the day in afternoon trading in New York.

For decades, senior U.S. officials have emphasized the value of a strong dollar, touting it as evidence of the vitality of the U.S. economy. During Trump's first term, many believed that the so-called strong dollar was put on the side because it was believed that it suppressed U.S. exports and reduced overseas revenues of U.S. multinationals.

Nevertheless, the dollar has soared since Trump was elected president in November as people are expected to boost economic growth and inflation, especially the hike in tariffs and tax cuts, and Slow down the pace of the Fed's interest rate cut.

In recent events, Trump vowed to maintain the dollar's global dominance and supported what economists and strategists believe will boost the dollar's value.

"We want fair trade, part of it, is taking a tough stance on exchange rates and terms of trade," Besent said.

Bester this week proposed a new plan to lower the highest interest rates in history, which has nothing to do with the Fed. In two interviews this week, Becent said Trump hopes to focus on lowering long-term interest rates, which are largely affected by the 10-year Treasury yield. The Federal Reserve's decision has a more direct impact on short-term interest rates, which control Americans' borrowing costs.

Despite Trump's fierce criticism of the Fed, Becente assured Wall Street that he would not try to "distort the Fed's arm" but would rather develop his own approach. "He (Trump) is not calling for the Fed to cut interest rates," Becent told Fox Business on Wednesday. Instead, he said Trump is focused on lowering the 10-year Treasury yield. "If we relax the control of the economy, if we complete this tax bill, if we lower the energy prices, then interest rates will naturally adjust, and so will the dollar."

On Thursday, Besson Tse told Bloomberg, "We are not concerned about whether the Fed will cut interest rates."

This may make Powell sigh because it is implicitly admitting that he intends to respect the Fed without any impact. Make currency under circumstancesRight to decide.

Bester's plan to separate the Treasury from the Fed is unusual. “It is very unusual for the Treasury Department and the White House to play an active role in impacting the 10-year Treasury yield. Historically, they have been working with the Fed,” said Ryan Detri, chief market strategist at Carson Group. Ke told CNN. “Returns can only be indirectly affected by fiscal and deregulation.”

The interest rates paid by Americans on mortgages, credit cards and other types of loans depend heavily on the 10-year Treasury bonds Rate of return. Although the Fed's currency actions will have an impact on it, the 10-year Treasury yield is free to float, which means any factor can cause it to fluctuate up and down without being affected by the Fed.

For example, during a period of intensified geo-conflict, investors tend to buy more U.S. Treasuries, including 10-year U.S. Treasuries, which are considered safe and stable investment assets, especially in uncertainty. period. The transfer of investors to safe assets has lowered yields, thus reducing Americans’ borrowing costs.

As Becente pointed out in an interview with Fox Business, when the Fed cut interest rates by an unusually 50 basis points last September, the 10-year Treasury yield was theoretically It should drop. However, it eventually went higher. This remains the case even after the Fed cuts interest rates twice again last year.

However, since Trump took office, the yield on the 10-year U.S. Treasury has dropped slightly. Becente believes this reflects traders’ recognition that the risk of holding U.S. bonds will be reduced if federal spending is cut. White House Press Secretary Caroline Levitt said last week that plans to "end serious waste of federal funds" are being pushed in part by the so-called Ministry of Efficiency led by Tesla CEO Elon Musk .

Trump said its focus is to promote economic growth through "expansion". The Federal Reserve's plans to cut institutions and spending cuts may prevent economic growth from triggering inflation, thus having a positive impact on Treasury bonds. “They want strong economic growth, but they also want to limit inflation expectations by controlling spending, and expectations of higher inflation are now quite dangerous because tariffs have the potential to reignite commodity inflation,” Joseph, senior economist at Interactive Bros. •Torres told CNN.

"In addition, the focus on 10-year Treasury yields reestablishes our long-standing monetary independence, which should rule out any impact. I think this is a good precedent worth highlighting again. ” Torres said.