Media & News

January 15, 2020

Exante’s Brad Setser Quoted by the US Treasury

Brad Setser’s work was quoted by the US Treasury in the offiical report released on January 14, 2020 (full quote below in blue). We are not sure a ‘private person’ has ever been named as a source before in that report, so we are a little impressed.

Quote from Treasury Report (see link):

“Treasury continues to track carefully the foreign exchange and macroeconomic policies of U.S. trading partners under the requirements of both the 1988 and 2015 Acts, including several that are not on the Monitoring List but are close to triggering key thresholds (e.g., Taiwan, Thailand).

For example, Taiwan is the only major economy in Asia that does not 5 Forward intervention is included on a trade date basis. 9 publish data on the full details of its international reserves consistent with IMF standards. [ We have been concerned by recent analytical work published by the Council of Foreign Relations suggesting that Taiwan may have engaged in substantial undisclosed foreign exchange intervention in the swap market. Brad Setser and S.T.W. estimate that Taiwan has conducted undisclosed foreign exchange intervention in the swap market totaling approximately $130 billion, and perhaps as much as $200 billion.}

Treasury continues to stress the importance of all economies publishing data related to external balances, foreign exchange reserves, and intervention in a timely and transparent fashion. ”

Importantly, the current ‘equilibrium’ for the TWD has been reached via accelerating spot intervention (as shown in our estimates below). Hence,  it is hardly a sustainable equilibrium. In particular, if the Treasury is starting to focus on hidden intervention, and push back against it,; then 2020 could indeed be an interesting year!

If you are interested in our views on TWD and Brad’s unique work on the topic, please reach out to us at  For example, we are planning a round-table on this and related topics in NYC soon, and may be able to invite a limited amounts of guests.