Treasury’s Bessent: We do want the dollar to be strong

• Treasury staff have not tried to block federal payments
• DOGE programs are an important audit of the government
• We want to have the best policies to create the conditions for a strong dollar
• China is the most-imbalanced economy in the history of the world
• China is trying to export their way out of a depression
• Says won’t talk about currency manipulators until April report
• As it becomes apparent that the President’s agenda is working, we will see a great deal of non-inflationary growth
• I don’t see any change in Treasury issuance in the foreseeable future
• What if inflation actually goes down
• I’m not sure where this narrative about tariffs being inflationary comes from

He was asked about tax cuts and talked about making the Trump tax cut permanent. That will be a very tall order and is unlikely but what’s harder to predict is how long the tax cuts will be extended for and how will they be paid for. Ultimately, that’s going to need some negotiation between the White House and Congress. What’s less clear is how much is priced in.

As for the currency, I don’t think it matters what any Treasury Secretary proclaims that he/she wants, it’s all about the policies. Lately, we have seen the US dollar fade as tensions around a trade war ebb and I suspect that will be an ongoing dynamic.

This article was written by Adam Button at www.forexlive.com.