Central bank leaders in Europe left the symposium in Jackson Hole with concerns that recent political moves by the US may indicate future issues in transatlantic financial cooperation. This was reported to Reuters by officials familiar with the discussions.
Representatives of the Federal Reserve attempted to assure their European counterparts that existing commitments would be met, but were unable to provide any guarantees regarding the political decisions of President Donald Trump's administration.
The main source of concern has been the intervention by the US Treasury on August 1, aimed at supporting the Japanese yen. Treasury Secretary Scott Baisent later confirmed that euros were sold to buy yen, but European officials expressed dissatisfaction that they had not received prior notice about this.
Recent actions regarding US public debt have also drawn significant attention. Baisent plans to increase the volume of long-term Treasury bond repurchases, possibly at the expense of increasing the issuance of short-term debt obligations.
European officials are worried that such measures may indicate Washington's willingness to intervene more actively to reduce borrowing costs.
One official raised the question of whether pressure could be exerted on the Fed in the future to buy bonds.
The US Treasury has denied such interpretations, stating that the increase in the volume of long-term bond repurchases aims to improve liquidity, not to set an upper limit on interest rates.
Officials also discussed dollar swap lines conducted by the Fed with major central banks, which provide dollar liquidity during financial crises. Some expressed concern that political tensions could ultimately jeopardize these mechanisms.
So far, there are no signs that the swap lines are under immediate threat, and officials expect them to remain unchanged.
The US Treasury emphasized that decisions regarding these mechanisms are solely within the jurisdiction of the Fed.
Meanwhile, Fed Chairman Kevin Warsh has sought to strengthen ties with foreign regulators since taking office, including during a recent visit to Europe, which generally left a positive impression.
