The Trump administration has frequently intervened in the financial markets, and the European Central Bank is concerned that the "long arm" will reach the Federal Reserve.

BlockBeats News, August 31 - European Central Bank officials have become increasingly concerned about the recent frequent interventions by the U.S. government in the foreign exchange and Treasury markets. Sources revealed that during the Jackson Hole Symposium last week, Federal Reserve officials took the initiative to reassure their European counterparts, promising to continue to uphold existing international cooperation arrangements. However, due to the Fed's institutional independence from the U.S. government, Fed officials could not guarantee that the Trump administration would not abruptly change its policies.

European officials are particularly attentive to recent financial market operations by the U.S. Treasury. On August 1, the U.S. Treasury intervened in the foreign exchange market by selling euros and buying yen, to which the European side expressed dissatisfaction with the U.S. not providing advance notification of such actions as usual. Furthermore, U.S. Treasury Secretary Janet Benson recently expanded the scale of long-term Treasury repurchases, prompting European officials to further worry about the blurring boundaries between fiscal, exchange rate, and monetary policies.

European officials further warned that if the U.S. government continues to use financial tools for economic and trade purposes, the markets may begin to question the Fed's policy independence and the stability of the dollar swap mechanism. They are concerned that the U.S. government may further pressure the Fed in the future to directly intervene in the Treasury market.

There is currently no indication that the dollar swap arrangements will change. The new Fed Chair, Kevin Walsh, has recently been actively enhancing communication with European policymakers, and his performance in international financial cooperation has been relatively positively evaluated by European officials.