Cross Purposes in Dollar Policies

Episode Details

In July, the US Treasury joined Japanese authorities in a joint intervention to prop up the yen — the first US action in support of the yen since 1998. Maurice Obstfeld joins EconoFact Chats to discuss why the intervention reflects the pursuit of conflicting goals — strengthening the yen, even as US tariffs weaken it, claiming a strong-dollar policy while pursuing currency interventions that weaken the dollar, and championing the dollar’s reserve role while treating foreign sales of Treasuries as a problem. He also contrasts the openly political support for Argentina’s peso with the strictly non-political criteria that have governed Fed swap lines — and why a request from the UAE puts that distinction to the test.

Maury is a Professor of Economics at UC Berkeley and a Senior Fellow at the Peterson Institute for International Economics. He served as Chief Economist at the IMF from 2015 to 2018.