US Treasury Secretary: 'Wash dismissal remark was a joke… strong-dollar policy means creating the policy backdrop'

US Treasury Secretary Scott Bessent moved to clarify President Donald Trump’s remarks about rate cuts and a strong-dollar policy. He said Trump’s comment about dismissing Kevin Warsh, the president’s pick for Fed chair, was made in jest.

According to the breaking-news account Walter Bloomberg on the 6th (local time), Bessent said of Trump’s remark that “if rates aren’t cut, he could fire Warsh” that “it was a joke.” He sought to draw a line under controversy over political interference in the Fed’s policy decisions.

While avoiding a detailed assessment of rate policy and the Fed’s role, Bessent laid out the administration’s stance on currency policy. “A strong-dollar policy is not simply about the level of the exchange rate,” he said.

He added that a strong-dollar policy “means creating the environment and backdrop in which the dollar can remain strong,” emphasizing that “sound economic fundamentals and a credible policy mix are important.” The comments were seen as underscoring structural factors over short-term exchange-rate intervention.

Markets have recently raised concerns that the Fed’s independence could be undermined amid Trump’s pressure for rate cuts and the possibility of changes to Fed personnel. Political controversy has continued in particular around Warsh as the next Fed chair nominee.

Bessent’s remarks are viewed as both dialing down the president’s rhetoric and reaffirming the principle of separating dollar policy from monetary policy. Markets continue to watch the Fed appointment process and the administration’s currency-related comments.