US Treasury Secretary Scott Bessent has attributed the sharp rise in US government bond yields to broader “global issues”, but stopped short of identifying the specific factors behind the latest market sell-off.
According to a Reuters report, Bessent made the comments on Tuesday before appearing before the House Financial Services Committee, as the benchmark 10-year Treasury yield climbed above 5% to its highest level since 2007.
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The move has intensified concerns over borrowing costs and financial market stability.
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The latest bond sell-off has unfolded against a backdrop of surging oil prices, persistent inflation concerns and expectations that the Federal Reserve could raise interest rates this week.
Brent crude has remained above $100 a barrel as the conflict involving Iran disrupts energy supplies, adding to inflationary pressure.
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The 10-year yield reached around 5.04% on Tuesday, marking its highest level in nearly two decades. Since Treasury yields influence borrowing costs across the economy, the move could raise financing costs for governments, companies and households.
Bessent's remarks came during a hearing officially focused on the international financial system, including potential reforms to the International Monetary Fund and World Bank.
However, the discussion also turned towards rising global bond yields and Washington's financial measures against Iran.
The hearing was briefly interrupted by protesters who demanded an end to US sanctions on Iran and the ongoing war. Security personnel removed the demonstrators before Bessent resumed his opening statement.
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Bessent also disclosed that the US administration has held private discussions with China over Iranian financial links. He said President Donald Trump is expected to continue discussions on Iran with Chinese President Xi Jinping at a summit later this month.
The bond market's next major test will come from the Federal Reserve's policy decision. Markets are heavily pricing in a rate increase, while investors will closely watch whether policymakers signal further tightening in response to inflation and energy-related risks.
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