Story perspectives

US Treasury Urges Fed to Expand Repo, Defend Yen

8/7/2026

Summary

Bessent Urges Repo Expansion

US Treasury Secretary Scott Bessent urged the Federal Reserve to expand Foreign and International Monetary Authority (FIMA) Repo Facility to defend yen.
The facility lets banks borrow $60 billion against U.S. Treasury securities.
Japan’s finance minister Satsuki Katayama said the ministry could use it in interventions.
Analysts say expansion would spare Japan from Treasury sales that lift yields.
Experts note $162 billion in foreign-RRP deposits or maturing Treasury bills as funding sources.

Summary

Bessent Rebukes Report

Strategists say the yen-support program changes the funding-trade calculus, makes short-yen bets riskier, and prompts traders to shift toward the euro.
Rutgers professor Richard Michelfelder warned that if Japan sold U.S. Treasuries, yields could rise and lift the 30-year mortgage rate, 6.66 %.
Treasury Secretary Scott Bessent rebuked WSJ reporter Nick Timiraos, calling his story “spoon-fed” after it suggested U.S. President Donald Trump’s administration was pulling the Fed into the effort.

History

Historical Context

In December 2007 the Federal Reserve created the Term Auction Facility, which delivered about $1.6 trillion of short-term liquidity and was expanded on September 29 2008 to $300 billion per day. Treasury Secretary Scott Bessent’s 2024 proposal to broaden the FIMA Repo Facility—allowing banks to borrow up to $60 billion against Treasuries—mirrors that crisis tool and aims to let the Bank of Japan avoid Treasury sales and keep yen yields low.

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Bessent Urges Repo Expansion

US Treasury Secretary Scott Bessent urged the Federal Reserve to expand Foreign and International Monetary Authority (FIMA) Repo Facility to defend yen.
The facility lets banks borrow $60 billion against U.S. Treasury securities.
Japan’s finance minister Satsuki Katayama said the ministry could use it in interventions.
Analysts say expansion would spare Japan from Treasury sales that lift yields.
Experts note $162 billion in foreign-RRP deposits or maturing Treasury bills as funding sources.

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