European central bankers express concern over U.S. Treasury interventions

European central bankers expressed concerns regarding the future of financial cooperation with the United States following the annual meeting at Jackson Hole. The apprehension stems from recent unconventional interventions by the U.S. Treasury in both currency and bond markets.

Specific concerns involve a recent Treasury intervention to support the Japanese yen, which included the sale of euros. European officials noted that Washington did not provide the customary prior notification for this operation. U.S. Treasury Secretary Scott Bessent stated that the use of the Exchange Stabilization Fund aimed to combat disorderly movements in the yen and protect global market stability.

Additionally, European officials are wary of the decision to increase long-term U.S. bond buybacks. While the Treasury maintains these actions are intended to improve market liquidity rather than serve as monetary policy or an attempt to cap interest rates, there are fears that such measures could indicate an administration-led effort to reduce borrowing costs through unconventional means.