U.S. Treasury Secretary Scott Bessent told lawmakers that rising bond yields reflect "global issues," as the 10-year Treasury yield hit its highest level since 2007. He credited recent Treasury buybacks and pointed to dollar strength as signs of market confidence in the administration's policies.
U.S. Treasury Secretary Scott Bessent told reporters Tuesday, as he headed into a House Financial Services Committee hearing, that rising bond yields were due to "global issues." The U.S. 10-year Treasury yield hit peaks not seen since 2007 amid a global bond rout affecting most other large economies.
Analysts point to oil, the Fed, and AI spending
Analysts tie the increase in U.S. bond yields to higher oil prices and expectations the Federal Reserve will raise its policy rate this week. They also point to competition for capital from AI spending and concerns about the U.S. fiscal trajectory. During the hearing, Bessent acknowledged the rise in the 10-year yield also reflects the need to address the deficit.
Despite this, yields have risen even as the Treasury has carried out buybacks of longer-term debt, a tool Bessent has described as a way to inject liquidity and slow the increase. He told lawmakers the buybacks were nonetheless a success.
Bessent touts buyback record and dollar strength
According to Reuters: "the best-performing bond market in the developed world" is how Bessent described the U.S. bond market's performance since Trump took office, pointing to what he called the two most successful Treasury auctions in 20 years. He also defended the Treasury's joint intervention with Japan to shore up its currency, saying it was meant to signal support for Japanese policies.
Bessent said the dollar's strength reflects the administration's credibility on regulatory, tax, trade and energy policy, which he said is bringing in trillions of dollars into the U.S. He separately blamed the Biden administration for current inflation, as Democratic lawmakers pressed him on the economy and the run-up in global oil prices.
Source: Investing.com
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