Good morning the mighty US consumer is fraying at the edges. Retail sales in July fell by $0.6%, the sharpest drop in a year, while University of Michigan consumer sentiment slipped in August after early‑month payrolls data. How many more data dumps are needed to convince markets that trouble is brewing?

A key twist in US‑Japanese yen intervention is the Federal Reserve’s FIMA repo facility. Two weeks ago the US sold euros to buy yen, easing pressure on the dollar‑yen rate and sparing Japan from selling part of its $1tn Treasury portfolio. Treasury Secretary Scott Bessent now suggests Japan could use the FIMA facility, lifting the $60bn алди per counterparty limit so Japan can borrow dollars against Treasuries rather than sell them.

Bessent’s push is framed as protecting US borrowing costs, but critics like Kevin Warsh and Maurice Obstfeld warn it could edge the US toward fiscal dominance. The Fed has described FIMA as a backstop that promotes the dollar’s global standing.

In practice, FIMA is a temporary liquidity backstop with unattractive pricing. Dollars borrowed must be repaid within a week, so it does not solve the core issue of raising dollars without selling Treasuries. The debate over expanding FIMA remains a sideshow to the larger question of US intervention power.