The United States has long accused Switzerland’s central bank of manipulating the franc through currency-market interventions, yet Washington itself deploys comparable tactics in bond markets to suppress long-term interest rates.
The Swiss National Bank (SNB) has faced repeated scrutiny from U.S. authorities over its policy of buying euros to weaken the franc when its appreciation threatens export competitiveness. The U.S. Treasury’s semi-annual currency report, which tracks potential currency manipulators since 2015, briefly listed Switzerland in late 2020 under the Trump administration. The SNB defends its actions as aimed at price stability rather than competitive devaluation, though the distinction has drawn skepticism.
On Wednesday, the U.S. Treasury announced plans to double its monthly purchases of long-dated Treasuries to at least $4 billion per operation, a move that immediately pushed yields lower. The strategy mirrors the SNB’s approach: restricting supply to influence prices—in this case, by reducing the availability of long-term bonds to drive down yields. Both institutions effectively manipulate market conditions, albeit in different asset classes.
U.S. Treasury Secretary Scott Bessent has earned a reputation as the most interventionist finance chief in decades, according to Bloomberg, with repeated measures to cap rising long-term borrowing costs. By suppressing yields, Washington also diminishes investor appetite for the dollar, indirectly weakening its currency—a dynamic that aligns with the definition of currency manipulation.
Market observers caution that such interventions typically yield only temporary effects and risk unintended consequences. In the U.S., the emergence of so-called “bond vigilantes” could reassert fiscal discipline by demanding higher yields in response to unsustainable debt levels. For a government agency like the Treasury, interventions also risk undermining credibility by signaling a willingness to override market signals.
