JACKSON HOLE, Wyoming: Europe's central bankers are leaving an annual getaway with their U.S. counterparts far from reassured that long-standing norms in global cooperation remain intact and worried that more turmoil is ahead for an already testy relationship with Washington, sources familiar with the discussion said.
Federal Reserve policymakers went out of their way to ease their concerns this week, promising to honor all of their commitments. But, given the separation between the central bank and the administration, they could offer no guarantees against sudden policy shifts by President Donald Trump, more than half a dozen officials on the sidelines of the Kansas City Fed's annual Jackson Hole Economic Symposium said.
Treasury interventions to prop up the Japanese yen and to lower longer-term U.S. borrowing costs were particularly concerning, as they foreshadowed more intervention and breaks with norms, the officials, who asked not to be named, said. After the August 1 yen transaction, U.S. Treasury Secretary Scott Bessent confirmed that the Treasury had sold euros for the Japanese currency and said he reassured central banks in the region that the move was "just a reallocation of resources."
While the Fed is the sole U.S. monetary policymaking body, independent in that mission by design from the elected administration, the sources said Trump has shown he is willing to go to extraordinary lengths to get his will across. Their concern was that this could set off upheaval in markets that would go far beyond the U.S.