Treasury Secretary Scott Bessent sarcastically offered to give Sen. Elizabeth Warren a tutorial on “Foreign Exchange for Dummies” in a blistering response to her criticism of the government’s intervention to prop up the Japanese yen, The Post has learned.
The lefty Massachusetts senator’s recent attack “unfortunately reveals that you know even less about foreign exchange markets than you do about banking,” Bessent wrote in a letter dated Thursday that was exclusively obtained by The Post.
“Terrifyingly, the opening paragraph is wrong about where the money came [from], what the transaction was, and whether there was even a borrower,” he added.
“What is equally shocking, but not surprising: not a single member of your media mob has a rudimentary-enough level of financial market literacy to spot your remedial error.”
The scathing letter came in response to an Aug. 13 missive from Warren demanding details about Treasury’s use of the Exchange Stabilization Fund, or ESF, as Washington joined Tokyo in buying yen after the currency plunged to a 40-year low.
Warren, the ranking Democrat on the Senate Banking Committee, argued that American taxpayers could ultimately be on the hook if Japan proves unable to repay Treasury — a premise Bessent flatly rejected.
“Treasury exchanged existing Exchange Stabilization Fund foreign-currency assets for yen,” he wrote.
“No new congressional appropriation was involved, and no credit was extended to Japan. Japan owes Treasury nothing,” added Bessent, who previously earned his fortune as a currency trader.
“There is therefore no risk that Japan will fail to repay a debt that does not exist.”
The recent intervention in the yen marked the first coordinated US-Japan effort to strengthen the currency since 1998.
Treasury, acting through the New York Fed, sold euros and bought yen as part of the effort, according to reports. The exact size of the US purchase has not been disclosed.
A Reuters photograph taken July 31 showed a notepad in front of Bessent bearing the words: “To Do Buy Japanese Yen (JPY) $5-10 bil.” The note appeared to indicate a contemplated purchase in that range but did not establish how much Treasury ultimately bought.
Warren seized on the lack of details in her Aug. 13 letter, demanding to know the scale of US financial support, its potential cost to taxpayers and Treasury’s legal justification for using the ESF.
Bessent responded to the legal question with another jab.
“Your legal question is answered by the statute cited in your own footnote,” he wrote, saying Section 5302 authorizes the Treasury secretary, with presidential approval, to deal in foreign exchange in support of orderly exchange arrangements.
“Treasury’s legal analysis begins with reading the statute. I recommend you try the same.”
Bessent also defended the intervention as protecting US economic interests, pointing to Japan’s role as a major holder of US Treasuries as well as a key trading partner and treaty ally.
“Disorderly yen markets can trigger forced unwinds, which could destabilize global markets and ultimately raise borrowing costs for American families and businesses,” he wrote.
“For a fuller explanation, I recommend any entry-level course in international finance for you and your staff, or I can give you a tutorial on Foreign Exchange for Dummies.”
Japan spent a record $96.5 billion intervening in foreign-exchange markets between July 30 and Aug. 26, according to government data released Friday, while Treasury has not publicly disclosed the amount of its own yen purchase.
The yen initially surged following the intervention before giving back much of those gains later in August.
In her letter, Warren invoked Treasury’s previous use of the ESF to provide $20 billion in support to Argentina, calling that intervention politically driven.
Bessent fired back that the Argentina operation was designed to address “acute, short-term illiquidity” and prevent a broader regional crisis.
“The best-managed crisis is the one that never happens,” he wrote.
“You, by contrast, appear to view preventable crises not as failures to avert but as welcome opportunities to expand government control — with ordinary Americans paying the price.”
Bessent closed the letter with one final swipe at Warren.
“The American people deserve oversight grounded in facts rather than slogans,” he wrote.
“Although I am not holding my breath, I hope your next letter will demonstrate that you have learned the difference between a currency purchase and a swap or a loan.”
The Post has sought comment from Warren.
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