U.S. Treasury Secretary Scott Bessent said Tuesday that rising bond yields stem from “global issues,” pointing to worldwide market pressures rather than domestic policy as the driver behind the recent climb in borrowing costs. Bessent made the comment to reporters as he arrived for a House Financial Services Committee hearing on the international finance system.
The secretary also confirmed he will meet with Chinese Vice Premier He Lifeng this weekend, setting the stage for a broader meeting between President Donald Trump and Chinese President Xi Jinping next week. Bessent told lawmakers the two leaders would continue discussions on Iran and on China’s financial links to Tehran, a relationship Washington has worked to sever as part of its effort to isolate Iran from Western financial systems. The war with Iran has now stretched into its seventh month.
Hearing Turns to Markets, Iran and the Economy
Though the hearing was formally focused on reforms to the International Monetary Fund and World Bank, lawmakers used the session to press Bessent on more immediate concerns, including financial market conditions, the broader economy and the administration’s sanctions campaign against Iran.
The hearing opened with disruption. Several protesters rose one after another inside the room, calling for an end to sanctions on Iran and to the war itself. Security removed them, forcing Bessent to pause and restart his opening statement before the questioning began.
Yields Hit Multi-Decade Highs

The backdrop to the hearing was a sharp move in U.S. government debt markets. The 10-year Treasury yield climbed Tuesday to levels not seen since 2007, part of a broader bond selloff affecting most major economies. Bessent told the committee the increase reflects “the need to address the deficit,” among other factors.
Analysts have linked the rise in U.S. yields to a mix of forces: higher oil prices, expectations that the Federal Reserve will raise its policy rate this week, growing competition for capital tied to AI-related spending, and mounting concern over the country’s fiscal trajectory.
Buybacks Defended as a Success
The yield increase has persisted despite the Treasury’s recent buybacks of longer-term debt, a strategy Bessent has previously described as a way to inject liquidity into the market and slow the rise in borrowing costs. Bessent told lawmakers the program worked and pointed to it as evidence of continued confidence in U.S. debt.
“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 hearing. “Since President Trump has come in, [the U.S. bond market] has been the best-performing bond market in the developed world.”
Bessent also defended the Treasury’s joint currency intervention with Japan, telling the committee it was intended to signal U.S. support for Japanese economic policy.
Inflation Fight Turns Political
Democratic lawmakers used the hearing to question Bessent on the state of the economy and on inflation, tying both to the Iran conflict and the resulting rise in global oil prices. Bessent rejected the connection to current policy, instead placing blame for inflation on the Biden administration and arguing that Americans are better off under Trump.
Lawmakers also asked Bessent whether Trump’s proposal to pay $5,000 to each American if Republicans retain their congressional majorities in the November election was a genuine plan. Bessent said he would work with House Speaker Mike Johnson to carry out the payments if congressional approval turned out to be necessary.
Dollar Strength Tied to “Certainty”
Bessent closed his testimony by linking the strength of the U.S. dollar to what he described as the administration’s credibility with markets.
“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.
What Comes Next
The weekend meeting between Bessent and He Lifeng is expected to shape the agenda for the Trump-Xi meeting the following week, with Iran sanctions and China’s financial ties to Tehran likely to remain central topics on both trade and security fronts. Beijing has repeatedly pushed back against Washington’s efforts to cut off its financial dealings with Tehran, arguing the restrictions overreach into its sovereign trade relationships, while U.S. officials maintain the measures are necessary to choke off funding for Iran’s war effort.
Markets, meanwhile, will be watching the Federal Reserve’s policy decision later this week for further direction on where yields head next. A rate increase, as several analysts now expect, could add fresh pressure to a bond market already grappling with heavy government borrowing, competition for capital from the AI investment boom, and unresolved questions about the country’s long-term fiscal path. For now, Bessent’s message to lawmakers was one of confidence: that the dollar’s strength and the bond market’s recent performance reflect deliberate policy choices rather than warning signs.




