Bob Elliott
· Nonconsensus
· May 06, 2026 at 09:50
· ⏱ 5 min read
| Read on Substack ↗
Summary
The author argues that foreign exchange (FX) interventions by policymakers in large, developed currency markets typically only create a short-term effect. Sustained impact is rare and requires extraordinary effort, particularly on the short side.
•FX intervention in developed markets usually results in a short-term 'pop' rather than a lasting change in trend.
•Significant and sustained impact from intervention requires "herculean efforts" and is more effective when trying to strengthen a currency (shorting the pair).
•The frequency of such interventions has meaningfully decreased since the start of the floating rate era.