The US Treasury has sought to calm investor fears saying it has sufficient liquidity to match any refunds for Trump tariffs ordered by the Supreme Court. This should have a tempering effect on rumors of a crypto market crash due to a lack of liquidity.
Treasury Says It Can Manage Trump Tariff Refunds
According to Reuters, U.S. Treasury Secretary Scott Bessent said the U.S. Treasury has more than enough funds to process refunds in case the Supreme Court rules the tariffs set by Trump’s administration are no longer valid.
Bessent said in an interview with the media that it would happen over weeks, even months. Instead of being paid all in one market, which could change the pace of the transaction.
Although Bessent said he has doubts that the court would ultimately strike the tariffs, he said that being ready is the key. He also said even in a worst-case outcome, refunds won’t create any money problems to fund the government.
Bessent also indicated that the refund procedure for the Trump tariffs could become rather complicated depending on what the Supreme Court rules. Rather than the request being denied or accepted, the ruling might be accompanied by some terms that make the refund procedure rather complicated, he said.
The Treasury head questioned whether the corporations, which had been swallowed by the tariffs in large numbers, would actually repay the money to the customers.
In response to allegations that the tariffs have contributed to inflation, Bessent stated that evidence does not show the existence of cost pass-through.
However, the expected impact of a potential market crash on the earlier part of the week amplified by the Court expectations has now been pushed to the back because of a different court ruling. The Supreme Court ruled in a different case, which pushed the timeline for the outcome of the Trump tariff verdict.
Crypto Market Crash Fears Tempered by Liquidity Backstop
The Treasury’s statement was meant to ease fears of an impending liquidity shortage. This was because markets were expecting that the heavy refunding requirement would compel the government to print more bonds, thus pushing the yield up.
Instead, by confirming the cash reserves are at almost $800 billion, Bessent actually signaled there won’t be a need for emergency borrowing. The cash balances in the Treasury stand at about $774 billion as of late last week and could reach as high as $850 billion by the end of March 2026.
As previously covered by CoinGape, analyst Wimar predicted a potential crash in the crypto market if a negative decision comes down on the tariffs.
Source: https://coingape.com/trump-tariffs-us-treasury-able-to-refund-amid-crypto-market-crash-concerns/
