U.S. Treasury Secretary Scott Bessent has dismissed concerns over instability in the government bond market, arguing that fears surrounding rising debt levels and Treasury yields fail to account for the strength of the U.S. economy and its fiscal outlook.
Speaking ahead of a two-day meeting of Group of 20 finance leaders in Asheville, North Carolina, Bessent rejected growing concerns about U.S. debt and criticism of the Treasury Department’s approach to managing volatility in financial markets.
He argued that recent market performance does not support claims that investors are increasingly worried about U.S. government debt.
“First of all, I’m not sure where the bond market turmoil is,” Bessent said, describing the U.S. bond market as one of the strongest-performing among major global markets this year.
Bessent also stressed that the United States remains in a stronger position than many other advanced economies because economic growth has continued despite large federal budget deficits.
“What’s important, too, is that we are growing,” he said.
Benchmark U.S. Treasury yields remained relatively stable over the past week. The yield on the 10-year Treasury note ended Friday at around 4.73%, as investors weighed concerns over the country’s fiscal outlook against continued signs of economic resilience.
Long-term yields also showed limited movement despite renewed hostilities involving the United States and Iran.
According to Bessent, higher energy prices and inflationary pressures linked to the conflict with Iran have contributed to rising yields, but he expects those pressures to ease over time. He also argued that higher yields partly reflect investor confidence in the strength of the American economy.
The Treasury secretary additionally rejected criticism surrounding the department’s unexpected decision to increase government bond buybacks.
The Treasury recently announced that it would at least double purchases of longer-term government debt to $4 billion per operation, after 30-year borrowing costs climbed to their highest level in 19 years.
Bessent argued that the rise in yields had become disconnected from underlying economic fundamentals.
He also compared the Treasury’s actions with much larger bond-market interventions previously carried out by the European Central Bank and the Bank of Japan, noting that those programs had attracted less criticism.
The Treasury’s repurchase program is intended to reduce volatility and maintain orderly market conditions, particularly during periods such as August when trading volumes are typically lower.
The expanded buybacks are scheduled to begin on September 10.
“I don’t think I can change the equilibrium price,” Bessent said. “My job is to slow things down … and make sure that the market doesn’t get disorderly.”
