US Treasury Secretary Bessent Defends Bond Market Amid Debt Worries

US Treasury Secretary Scott Bessent has dismissed concerns about turbulence in the government bond market, arguing that the US economy's strength and fiscal outlook are being overlooked. In an interview ahead of the G20 finance leaders' meeting in Asheville, North Carolina, Bessent said he was unsure where the bond market turmoil was, pointing out that US bonds were the best performing among global peers this year.

Bessent emphasised that the US is in a stronger position than many advanced economies because it continues to grow despite running large budget deficits. He noted that benchmark 10-year Treasury yields remained stable, ending the week near 4.73%, as investors balanced fiscal concerns against resilient growth. He attributed higher yields to energy prices and inflationary pressures from the Iran conflict, which he expects to fade over time, and said they reflected confidence in the economy.

Bessent also defended the Treasury's decision to increase bond buybacks, rejecting criticism that the move distorts markets. He drew parallels with larger interventions by the European Central Bank and the Bank of Japan, saying those actions faced less scrutiny. The Treasury's buyback program, set to expand to $4 billion per operation starting September 10, is aimed at preventing disorderly market moves, not setting prices. Bessent said his job is to slow things down and ensure the market remains orderly.