Roach warns that Bessent's attempts to prop up the dollar are destined to fail, echoing past FX intervention failures
Executive summary: Roach told la Repubblica that Bessent's moves to save the dollar have been a disaster, likening them to failed attempts to control the yen exchange rate. The statement casts doubt on the viability of direct Treasury intervention in currency markets, which could affect dollar stability, investor confidence, and future policy decisions on exchange-rate management.
Who is involved: Roach (Yale professor), Scott Bessent (US Treasury Secretary), foreign‑exchange markets and investors.
Likely next: Continued debate over the appropriateness of Treasury FX actions, potential market reactions to any further intervention, and closer scrutiny of the dollar’s trajectory ahead of upcoming Fed meetings.
Yale professor Roach characterized US Treasury Secretary Scott Bessent's recent efforts to strengthen the dollar as a "true disaster," arguing that trying to control exchange rates is bound to fail. He pointed to the yen's experience as a historical precedent where similar interventions collapsed. The comment highlights growing skepticism about the effectiveness of Treasury-led FX policy amid ongoing market volatility.
Timeline
- — Roach: “Le mosse di Bessent per salvare il dollaro sono state un vero disastro” (la Repubblica — Economia)
- — Here’s how Bessent’s newly activist Treasury Department is undercutting the Fed’s Warsh (MarketWatch)
- — Trump, Vance and Bessent try to calm the bond market with ‘alternative facts’ (MarketWatch)
- — Wall Street is bemused by Bessent’s bond plan and the unwinding punt on the Japanese yen—he’s hinting he knows something the markets don’t (Yahoo Finance)
- — One day after doubling Treasury buybacks, Bessent says he's ready to boost them further to push down long-term yields (Yahoo Finance)
- — Treasury rout restarts one day after Bessent’s beefed-up buyback plan (MarketWatch)
Analysis — what this means
Sectors affected
- Foreign exchange markets
- Oil sector
Historical parallels
- Japan's 1990s efforts to defend the yen ended in failure, similar to Roach's warning about dollar intervention
Key entities
Sources
- Roach: “Le mosse di Bessent per salvare il dollaro sono state un vero disastro” — la Repubblica — Economia
- Here’s how Bessent’s newly activist Treasury Department is undercutting the Fed’s Warsh — MarketWatch
- Trump, Vance and Bessent try to calm the bond market with ‘alternative facts’ — MarketWatch
- Wall Street is bemused by Bessent’s bond plan and the unwinding punt on the Japanese yen—he’s hinting he knows something the markets don’t — Yahoo Finance
- One day after doubling Treasury buybacks, Bessent says he's ready to boost them further to push down long-term yields — Yahoo Finance
- Treasury rout restarts one day after Bessent’s beefed-up buyback plan — MarketWatch