US treasury chief Bessent backs using US financial power as foreign policy tool - Reuters

The remarks from Treasury Secretary Bessent signal a deliberate continuation of a long-standing Washington strategy: leveraging the dollar’s dominance and the reach of the US financial system to advance geopolitical objectives. This approach encompasses tools ranging from sanctions and asset freezes to export controls on financial technologies. For global investors, the statement serves as a reminder that the US financial architecture is not purely a neutral utility but an active instrument of statecraft.

The market relevance here is twofold. First, it reinforces the structural demand for dollar-based assets, as the system’s power derives from its depth and liquidity. Second, it highlights the ongoing, slow-burning risk of fragmentation. Foreign central banks and multinational corporations have, for years, been quietly diversifying reserves and settlement channels in response to the weaponization of the dollar. While no viable near-term alternative exists, any acceleration of this trend could incrementally raise funding costs for US debt and alter cross-border capital flows.

What to watch is the calibration of enforcement. The key question for markets is not whether the US will use its financial leverage, but how precisely it defines the boundaries of that power. Any shift toward broader, more aggressive application could increase compliance costs for global banks and heighten volatility in emerging markets that rely heavily on dollar funding.