The U.S. Treasury instructed Goldman Sachs and Morgan Stanley to conduct a significant foreign exchange market intervention. This operation marks the first direct U.S. action to influence exchange rates in decades.
The New York Fed directed the banks to sell euros and purchase Japanese yen. This historic move follows the yen dropping to 30-year lows against the U.S. dollar.
The intervention departs from the standard U.S. policy of allowing currency markets to float freely. Excluding coordinated central bank efforts in 2011, the Treasury last intervened directly in 1998.