European central bankers fear more U.S. policy turbulence, Reuters reports

European central bankers left the Jackson Hole symposium worried that recent U.S. policy moves could signal further strains in transatlantic financial cooperation, according to a Reuters report on Sunday.

The report cited more than half a dozen officials familiar with the discussions. Federal Reserve policymakers tried to reassure their European counterparts that existing commitments would be honoured, but offered no guarantees over policy decisions by President Donald Trump's administration.

Yen intervention frustration

A key source of concern was the U.S. Treasury's August 1 intervention to support the Japanese yen. Treasury Secretary Scott Bessent later confirmed that euros had been sold to purchase yen. European officials were frustrated that they had not received the customary advance notice.

Treasury buybacks under scrutiny

Recent moves involving U.S. government debt have also drawn scrutiny. Bessent plans to increase buybacks of longer-dated Treasuries, potentially financed through greater issuance of shorter-term debt. European officials fear such measures could signal a willingness by Washington to intervene more actively to reduce borrowing costs.

One source questioned whether pressure could eventually be placed on the Fed to purchase bonds. The Treasury rejected that interpretation, saying increased long-end buybacks are designed to improve liquidity rather than impose a ceiling on interest rates. A Treasury official had said on Thursday that the department was focused on bringing long-term yields lower after they moved above what it considered fair value.

Dollar swap line concerns

Officials also discussed the Fed's dollar swap lines with major central banks, which provide dollar liquidity during periods of financial stress. Some expressed concern that political tensions could eventually put the facilities at risk.

There has been no indication that the swap lines face any immediate threat, and officials expect them to remain intact. The Treasury stressed that decisions over the facilities rest solely with the Fed.

Fed Chair Kevin Warsh, meanwhile, has sought to strengthen ties with overseas policymakers since taking office, including through a recent trip to Europe that left a broadly positive impression.