By David Lawder

WASHINGTON, Sept 15 (Reuters) – U.S. Treasury Secretary Scott Bessent on Tuesday blamed rising bond yields on “global issues” and confirmed he will meet with Chinese Vice Premier He Lifeng this weekend ahead of a meeting between President Donald Trump and Chinese President Xi Jinping next week.

Bessent told a hearing of the House Financial Services Committee that Trump and Xi would continue discussions on Iran and China’s financial links to Tehran, which Washington has been seeking to shut out of Western financial systems as the war with Iran 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 a variety of more pressing issues, like the state of financial markets and the economy, and the administration’s punitive financial measures against Iran.

As the hearing got underway, 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 yields on Tuesday hit peaks 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 things. 

U.S. bond yields have risen despite recent Treasury buybacks of longer-term debt that Bessent has described as a way to inject liquidity and to counter the rise in yields, or at least slow it down.

Bessent told lawmakers the buybacks were a success and underscored U.S. credibility.

“There is a counterfactual of what would it have done — and we then proceeded to have the two most successful Treasury auctions that we’ve had in 20 years,” Bessent told the congressional hearing. “Since President Trump has come in, (the U.S. bond market) has been the best-performing bond market in the developed world.”

He also defended the Treasury’s joint intervention with Japan to shore up its currency, saying the U.S. did it to signal support for Japanese policies. 

Several Democratic lawmakers pressed Bessent on the state of the economy and rising inflation — tying it to the Iran war and the run-up in global oil prices. Bessent blamed inflation on the Biden administration, and insisted Americans are better off under Trump.

He was also asked if Trump’s proposal to pay each American $5,000 if Trump’s Republican party maintains congressional majorities in the November election was a serious one. He said he would work with House Speaker Mike Johnson to make those payments happen if congressional approval proved to be needed.

Bessent said the U.S. dollar’s strength reflects the Trump administration’s credibility.

“A strong dollar is not a price on a screen; it is a set of behaviors, and what we have seen in this administration, where we are creating regulatory certainty, tax certainty, trade certainty and energy certainty that is bringing in trillions of dollars into the U.S.,” Bessent said.

(Reporting by David Lawder; Writing by Susan Heavey and Ann Saphir; Editing by Doina Chiacu and Andrea Ricci)


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