August 4, 2026
WHEN: Today, Tuesday, August 4, 2026
WHERE: CNBC’s “Squawk Box”
Following is the unofficial transcript of a CNBC interview with U.S. Treasury Secretary Scott Bessent on CNBC’s “Squawk Box” (M-F, 6AM-9AM ET) today, Tuesday, August 4. Following are links to video on CNBC.com: https://www.cnbc.com/video/2026/08/04/treasury-sec-bessent-a-stable-yen-is-important-not-only-for-the-u-s-but-for-the-entire-region.html, https://www.cnbc.com/video/2026/08/04/treasury-secretary-bessent-we-may-have-a-deal-today-or-tomorrow-to-open-the-strait-of-hormuz.html, and https://www.cnbc.com/video/2026/08/04/watch-cnbcs-full-interview-with-treasury-secretary-scott-bessent.html.
All references must be sourced to CNBC.
JOE KERNEN: The U.S. and Japan confirmed a coordinated yen buying intervention. Joining us now with the details of how it came together, Treasury Secretary Scott Bessent. Mr. Secretary, it's good to see you this morning.
SCOTT BESSENT: Joe, always good to be with you.
KERNEN: You, you know about, about the yen. I guess you had some experience in the private sector, maybe from the other side of the trade at one point. Is there anyone who, who is as adept at working with, with yen, I don't know, is it manipulation? What is it? Support or in the, in the last case, it wasn't supportive. It was actually shorting it, I think.
BESSENT: Well, Joe, I think it's important to have a framework here. And just to level set here, the framework begins with the strong relationship between President Trump and the prime minister. And I have an extremely good working relationship with my counterpart, the finance minister, Katayama. And, you know, I have been, I've been going to Japan, since I think 1989 and have more than 50 or 60 visits here. So, I'm well-versed. But what's important here is we've been in close contact with our Japanese allies, and they are great allies in the region, both militarily and economically. And, you know, we understand that they are making serious efforts to stem the un – substantial undervaluation in their currency. And, Joe, this is more than just a market intervention that, through our conversations with them, we believe that they are going to continue to put the right policies in place that will lead the yen to get back to more of a normal equilibrium price.
KERNEN: Yeah. I was wondering whether you've got some ideas about how Japan needs to do that, because there obviously are still some problems. Rates are probably negative there with the short-term rate at 1 percent. And we think we've got it tough here in terms of debt as a percentage. I think they're at 230 percent right now. That's almost hard to believe, Mr. Secretary.
BESSENT: Well, there are a lot of ways of counting it because most, excuse me, much of it is held by Japanese citizens and by their pension system. So, you know, I think if you net it down, it doesn't look like that.
KERNEN: There’s that.
BESSENT: And the other thing too is, look, they're moving toward budget discipline. They're going to have a primary surplus for the first time. And, Joe, if I put on my economic historian hat and look back that I, in the late ‘90s, ‘97, ‘98, the Asian financial crisis, in my opinion, part of it was triggered by an overly weak yen. So, I think a stable yen is not only important for the U.S., but it's very important for the entire region, because if the yen were to weaken substantially, then the other currencies would follow it. You know, we'd seen excess volatility in the Korean won. Many people believe that the Chinese RMB is undervalued. So, given, given the trade flows, given the size of the economy, given their contribution to the global savings market, very important to have a stable yen that the Japanese government understands that, and we are proud to stand with them and implementing their policies and help them stabilize the region.
KERNEN: That's obviously, for a lot of reasons, it's probably in the United States’ best interest that we don't see a run on, or a continued run on the yen. I just got to ask you, when you're a sly dog, when you, when you wrote that down, buy five to 10 billion and it, the printing looked so big. You've done this before, haven't you, where, you know, people are looking over your shoulder. You know, did you need to be reminded, oh, things to do, buy ten to billion, buy five to 10 billion in yen. Tell me what was really going on there, Mr. Secretary.
BESSENT: Well, I just wanted to make sure that all the reporters looking on, over my shoulder also knew the symbol, JPY, for the Japanese yen. So—
KERNEN: Okay.
BECKY QUICK: Instead of shorthanding yourself.
BESSENT: Yeah. You know, I was going to finish the list. You know, the, the rest of the list was, you know, like go, go and have lunch with the supreme leader, play tennis with Putin, you know? But I thought I would just leave it at the buy five to 10 billion of Japanese yen.
KERNEN: Well, it's got a much better chance, a coordinated, probably intervention because Japan blew through about, I don't know how much do they, did they blow through in April and May that didn't really stem the decline? And speculators are on notice now if they lean too hard on the carry trade, they're going to get it handed to them. And that's part of the rationale, I guess.
BESSENT: Well, Joe, you know, I think in 2011, 2012, when the, when the yen, which was substantially overvalued at that point. It was, you know, about 78.
KERNEN: The earthquake. Yeah.
BESSENT: Yeah. But the, even then and pre-Abenomics, the yen was bouncing around 78 to 82. And at the end of the day, you can give market signals with intervention. But it's policy that turns it. So, it was the beginning of Abenomics, Prime Minister Shinzo Abe. It's been a resounding success. Japan has come out of deflation and they're back. And I think here, we can give market signals. But at the end of the day, it's going to be policy and fundamentals. And the U.S. decided to join because we are very optimistic on their policy path.
QUICK: Would it also require a rate hike by the Bank of Japan, do you think?
BESSENT: I think that the policy path, I'm not going to prejudge what the BOJ should do. I've known Governor Ueda for more than 15 years, and I believe that he will do what is needed. And you know, I think that the prime minister, who is doing a fantastic job. And you know, if we look back, one of the little noticed things in Abenomics was something called womenomics. Japan had traditionally had a very low participation relative to Europe relative to the U.S., of women in the workforce. And now in Japan, we have women with two of the top three jobs. But, you know, it is going to require a policy to follow up with the intervention. And I'm highly confident we're going to see that.
KERNEN: Because one thing we definitely don't want is Japan selling treasuries to do this. So, you have encouraged the Federal Reserve to upsize. Can we call it a FIMARF? Is there an acronym for this? The Foreign and International Monetary Authorities Repo Facility. Have you ever called it a FIMARF? I, can I coin that? Can I trademark that?
BESSENT: Sorry, Joe, a day late and a yen short. It's called the FIMA facility and the -- we'll give you something. We'll come up with something for you next time. And look, the -- what the facilities that the Federal Reserve has, whether it's the FIMA facility or the swap lines, the purpose is to protect the U.S. economy and to keep any volatility offshore, prevent it from happening before it reaches our U.S. shores. And the FIMA facility was done in 2020, size of the bond market was much smaller then. So, I think it would be reasonable for the Fed to consider upsizing the facility. I'm happy that the Japanese government wants to use it and draw on it, and it's a completely secure lending facility. We have swap lines outstanding, so it's really no different than a swap line that the country post collateral, and we lend them the money to intervene in this case. And I think it is a very robust facility. And I think it was set up for occasions just like this.
QUICK: Mr. Secretary, you spoke about this as kind of a currency intervention, as diplomacy, because we have a close relationship with Japan, because we're trying to work with them on a lot of things. But the Treasury Department actually, sold euros to buy those yen. The sale of the euros is that kind of collateral damage in this, or was there diplomacy that was at work there, too, for partners we may not be as happy with lately?
BESSENT: No. The Europeans are, obviously in close contact with our European partners, including at the Central Bank, including some of the finance ministers of the nation states. And I assured them that it was just a reallocation of our reserves. Seems to me that the euro is much closer to an equilibrium price. I'm not going to talk about where the euro should or should not trade, but it's really the substantial undervaluation of the yen here and the policies that the Takaichi government is pushing, putting in place to change that.
QUICK: The idea of the carry trade, obviously, you're protecting against people relying on the carrying trade too heavily. Do you think it would be a bad thing if the carry trade went away entirely, or does it depend on if that's an orderly move?
BESSENT: Well, I don't think the carry trade is ever going to go away entirely. Japan has a gigantic surplus of foreign assets, and they provide liquidity to the rest of the world. Japan Inc. since the ‘70s, ‘80s, all through the ‘90s up until now has accumulated substantial overseas assets, and I see no reason for that to stop. And it's just the level of the yen that could trigger other problems or trigger competitive devaluations, which is unhealthy.
KERNEN: A lot of things, making it sort of tough on, on Japan, right now, Mr. Secretary. I'm just wondering whether just purely fiscal and even monetary changes can really help. I mean, there's a lot of capital inflow. It's good for us. A.I., all the money's coming here around the world because this is where the returns are in A.I. You know, the war in Iran makes their importers of energy in Japan. I mean, it's just, it's, what's the Shakespeare quote? How all occasions doth inform against us. It just seems like one thing after another has put additional pressure. Could they raise rates like they should? Could they end Q.E. or would that just compound their problems?
BESSENT: Well, a lot to unpack there, Joe. So, let's start with in my X post over the weekend, I said, I believe the Japanese government understands that we're at the end of Abenomics or one phase of it, and now we're in the implementation stage. It has been wildly successful in reflating the Japanese economy, normalizing the economy, bringing them out of deflation. And I think now, we're going to see a strong growth. They've had strong wage growth. The economy is quite strong. Japan's tech sector, while it doesn't match the U.S., is very, very strong. Japan, Korea, two of the strongest in the world. And then when you talk about, the energy price, Japan is a substantial importer of energy from the Gulf. And we've seen President Trump last week threatened what would have been one of the largest military campaigns or the largest military campaign since World War II, against the Iranians. And now, we are, because of that, we are in talks with the Iranians. And I think there is a chance we may have a deal today or tomorrow to open the strait and move towards a more normalized position in this conflict. And that's because their air force is wiped out, their navy is wiped out, substantial portion of their missiles are wiped out. More importantly, their missile production capability is wiped out. So, anything that happens in the Gulf will benefit Japan and indeed the rest of the world, Joe.
QUICK: Just to clarify on that, Mr. Secretary, the idea of having a deal today or tomorrow to reopen the strait, would that be reopening the strait, but the Iranians somehow having the ability to charge a toll on that? Or would that be reopening the strait, and it's free and clear and anybody can move through?
BESSENT: I think it would be freedom of movement. And even though things are still a little dicey there, over the past few days, we saw quite a few ships coming out even now. So, I would expect the energy prices to settle back down, which, as I said, will be good for the entire world. And once the strait reopens, there are hundreds, if not a thousand ships sitting in there waiting to go out. And you know, Becky, it's not just energy, it's fertilizer. It's refined products. It is the various industrial gases. So, I think that we could see a big relief trade as those prices go down.
QUICK: In fact, as you've been speaking, Mr. Secretary, the WTI price is dropping. We were looking at oil—
KERNEN: Eighty-two.
QUICK: At $82 earlier this, earlier this morning. Now it's trading at $78. I guess you watch those levels pretty closely. What do you watch on a daily basis? Is it oil? Is it the 10-year? Is it the 30-year? The two-year? Is it the yen? What are the things that you're watching most closely?
BESSENT: All of the above, Becky. The, but you know, what I really watch is how the U.S. economy is doing. And the economic numbers have been strong. We had manufacturing ISM, strongest since 2022 when we came out of COVID, and manufacturing is back in the U.S. We are seeing substantial nonresidential building going on. So those are construction jobs. As Andrew asked the professor from Notre Dame earlier, is this temporary or is it sustainable? And you know what I would say with overall manufacturing, if I look at my hometown, Charleston, South Carolina, Boeing is doing a 50 percent increase in their production there. So those are construction jobs, but those are going to morph into 1,000 great, high-paying industrial jobs. So, we're seeing this manufacturing renaissance happen.
KERNEN: You know what wouldn't help the yen is if Warsh and co. raised rates in September. I just wonder whether that, should we be thinking, should we be thinking about that? And just opine on what you saw at the last meeting, the lack of, you know, the lack of any sort of guidance and the criticism about no transparency and we don't know what the roadmaps are. And we don't, we don't need a cheat sheet on the test, but we need to know what's going to be covered in the test. And it's causing volatility in the bond market because of a 13-basis point move. What do you make of all that, Mr. Secretary?
BESSENT: Well, Joe, you know, I think of this as a detox that the, both the financial markets, financial journalists, the, no one on this screen, but many others, especially the—
KERNEN: Not currently.
BESSENT: Especially in print, had just become stenographers. And same for many of the Wall Street firms. Look, I began with Wall Street in 1984, and you didn't, you never knew what the Fed was going to do, and you had to be positioned accordingly. And you actually had to do your own work. And, you know, I think we are seeing a detox here and all this with forward guidance that I think every meeting should be live and that market participants should make their own judgments. Because I can tell you, Joe, in my opinion, what caused the Great Inflation, the Fed was late raising rates. But the reason they were raising rates is that November of ‘21 was clear that the economy was hot and the Fed needed to do something, but they kept Q.E. going the, until the month before they started hiking rates. So, they were buying hundreds of billions of dollars of bonds. And that was because they felt locked in with forward guidance. So, I think Chair Warsh wants to maintain optionality for optimal outcomes, and I am sure that under his leadership, the Fed will balance between their growth mandate and their inflation mandate.
KERNEN: There is a lot of question, though, of how to orchestrate a stand pat on rates for the chairman with the economy you described. I mean, if you, you know, back out all the imports of infrastructure for A.I., what's that other, that other number was 3.9 or something, I think, wasn't it for, for prices, charge. I mean, that's strong. Inflation is still above target. Will the promise of A.I. in terms of productivity, will that arrive quickly enough for Chair Warsh to bring down the inflation rate in a way other than trying to slow the economy with higher rates?
BESSENT: Well, I think we have to look and think, what does an increase in the short-term rate actually do? So, we'll see on that. But the other thing too is I think that there are a lot of short-term indicators here, much of it energy-related, that will work its way through the system. When energy, when we had the MOU with the Iranians in early June, you know, from June, for the June inflation numbers, we saw one of the biggest drops in years. So, you know, there's a very noisy component in there. But what gives me the confidence is that the underlying numbers, they are very tame. So, core inflation away from the fast-moving segments that are impacted by energy have been very quiescent. And I think we're going to continue to see that.
QUICK: Secretary Bessent, just, we've been watching the A.I. trade so closely, and there are some people, including Steve Eisman, who was with us last week, who said he thinks everything is an A.I. trade right now, and it's either going to go very well or very badly, depending on how that shakes out. He related it through to companies even like Caterpillar, which, by the way, is up more than eight percent this morning on stronger than anticipated earnings. But it's been down over the last month as people worried about whether the A.I. trade could continue. Everything in A.I. is related pretty closely to interest rates. If interest rates rise and it's harder to get debt or it's more expensive to get debt as a result, and that data boom and the rest of it kind of slows down, do you think that impacts the overall economy in a big way, or do you think that's more of a market play?
BESSENT: Well, Becky, we've seen interest rates rise and we've seen no letup in this A.I. CapEx. And look, I like Steve, but I think that categorically, to categorically say that everything's an A.I. trade is an incomplete thought that I think the underlying dynamics of the economy are very strong. And I, one thing that is very interesting to me is we are seeing this small business formation, and we can see it as we talk to the nation's banks, as we see the filings at the IRS. And for new start-ups, we are seeing like this big main street and small business revival, and I think a lot of that may be due to A.I. “Wall Street Journal” had an interesting story, I believe it was last week or the week before that said, you're seeing the rise of the one-person startup, and a lot of that is A.I.-enabled. And the professor from Notre Dame was talking about, what we are seeing in terms of A.I. implementation. And I’m old enough to remember what happened in the ‘90s when we saw the office tech boom, and you saw this whole cottage industry spring up that didn't previously exist of, I think they were called system integrators. And they were bringing, you know, the office modernization revolution into both small, medium and large businesses. And I would expect we could see a boom in that, the, over the coming years. So, you know—
QUICK: Interesting.
BESSENT: But on the other side, we are seeing the rest of the economy is performing very well also.
KERNEN: Yeah, the ISM and, I mean, the stock market, obviously. Inflation is still one of the things that, especially during a war, with a closed strait, at least as of the day, is still something that if there was anything that was going to be a bump in the road, it's still worries about inflation. Are there indications to you that, that the underlying problem with shelter or with services or with wages, are there signs that that maybe the good numbers we just saw in the past reports, will that continue even though oil is back up and give Chair Warsh some leeway in September?
BESSENT: Well, again, I don't think that Chair Warsh or indeed the overall FOMC, you got to remember, Joe, when they raise rates here, if they raise rates, they're looking at long and variable lead times. So, they've got to be thinking what's going on nine, 12, 18 months out. And I do think that there are a lot of things going on there. You know, we're seeing shelter owners, equivalent rent, rents come down. And that's where core inflation is. And the media doesn't want to report it, but President Trump has done it again, same as he did in his first term. In the president's first term, hourly workers did better than supervisory workers. And now, what we're seeing now is the bottom quartile of wage earners have had year over year, 5.5 percent wage gains. And that's three times more than the top quartile. So, look, this inflation and this affordability crisis that the Biden era got us, you know, this big increase in our step function increase in price levels, there are two ways to combat that. There's, you can slow the inflation, which I do believe the core inflation is slowing. But for working Americans, real wage gains. And we can see that the bottom 25 percent of workers had a 2 percent wage gain. And with everything that we're seeing in the media, it's difficult to discern. But we think that the American people will be feeling that over time. And they're also feeling the benefits of the Working Families Tax Cuts. You know, I’m the, also oversee the IRS, and 44 percent of American households had one of the president's signature policies, no tax on tips, no tax on overtime, reduced taxes for seniors on Social Security and deductibility of auto loans. So, we are starting to see a, I got sick of hearing about this K-shaped economy. I can say here definitively, the K-shaped economy is over, and we're seeing more of a C economy where the lower end of wage earners are finally calling it back, just like they did in President Trump's first term.
KERNEN: Before we let you go, just to return to the yen one more time, have you written anything down while we're talking like I'm good for another, another 10 if necessary or tell the Fed to increase the FIMARF? I'm calling it the FIMARF, I don't like your FIMA, I don't know. But will, rarely in the past does one or two interventions solve the problem if the, if the underlying problems aren't, like if they don't raise rates in Japan, we may need to put more. Are you willing to, are we willing to do more?
BESSENT: We're in close contact. And, Joe, you got to think that the U.S. would not have joined if we were not very, very optimistic about the policies that the Takaichi government is going to implement. And I think they will understand what needs to be done here. And they're getting out of this vicious cycle because do they have an inflation problem? Yes. Is part of the inflation problem due to the weak yen because of the pass-through? Yes. So, one of the ways to give self-help, as they've been doing, is to stop this excess volatility in the yen. And we're in constant communication with them. And we will do whatever it takes to support them in a way that helps the American economy, the American taxpayer, and stabilizes the global economy.
KERNEN: All right. Just wondering if there's a crush like behind you at, of reporters when you're sitting there, you know, for a person to get their best seat to—
QUICK: To check out the to do list.
KERNEN: To check out the to do list.
BESSENT: Well, I can tell them what's on my to do list. It's like get to the grocery store this evening. I haven't been in a while.
KERNEN: I know you probably have a lot of other things to do, and we appreciate all your time this morning, Mr. Secretary, as usual. Thanks. Thank you.
BESSENT: Good to see both of you.
KERNEN: Okay.
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Stephanie Hirlemann
CNBC
