Treasury Secretary Scott Bessent defended a range of Trump administration economic policies before lawmakers on Tuesday, from currency and bond market interventions to AI safety, disclosing plans to meet with his Chinese counterpart this weekend. Bessent told a hearing of the House Financial Services Committee that U.S. President Donald Trump and Chinese President Xi Jinping would continue discussions next week on Iran and China’s financial links to Tehran.
Washington has been seeking to shut Iran out of Western financial systems as the Iran war stretches into its seventh month. The hearing was nominally on the international finance system, including reforms to the International Monetary Fund and World Bank, but lawmakers peppered Bessent with questions about more pressing issues, such as the state of financial markets and the economy, and the administration’s financial measures against Iran. As the hearing got under way, several protesters stood up one after another to call for an end to sanctions on Iran and the war, forcing Bessent to stop and restart his opening statement.
The people were hustled from the room. Bessent told reporters rising bond yields were due to “global issues,” as he headed into the hearing. The U.S. 10-year Treasury yield hit peaks on Tuesday not seen since 2007 amid a global bond rout experienced by most other large economies.
Analysts tie the U.S. bond yield increase to higher oil prices and expectations the Federal Reserve will raise its policy rate this week, as well as 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 reflects “the need to address the deficit,” among other factors. U.S. bond yields have risen despite the Treasury’s decision to double the size of longer-term debt buybacks that Bessent has described as a way to inject liquidity and counter the rise in yields, or at least slow it down.
Bessent told lawmakers the buybacks were successful in keeping yields from rising more, and that they underscored U.S. credibility. A stronger yen means that the Japanese government will not have to sell U.S. assets to finance foreign currency intervention,” Bessent added. Several Democratic lawmakers pressed Bessent on the state of the economy, inflation and the rising cost of living — tying it to the Iran war and the run-up in global oil prices.
Bessent blamed inflation on the previous Biden administration, and said Americans are better off under Trump. He pointed to fresh data from the U.S. Census Bureau showing that the percentage of Americans in poverty last year dipped 0.5 percentage point to the lowest rate on record, 10.2%, with 34.5 million Americans in poverty.
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