Treasury chief downplays rising yields and AI hype, cites strong US economy

Treasury Secretary Scott Bessent said that the uptick in US Treasury yields is consistent with global market dynamics and should not cause alarm, emphasizing there is no evidence of investors fleeing US debt for German or Japanese securities. He said his role is to encourage deliberation rather than control bond prices. Bessent highlighted the United States’ recent financial rescue of Argentina, suggesting the stabilization could reshape Latin American alliances and may be replicated elsewhere.

He also referenced past coordinated currency interventions with Japan. While soft jobs data offered some relief, yields have risen due to higher fuel costs from the prolonged Iran conflict, fiscal concerns and surging AI investment. Bessent dismissed the notion of an AI-driven bubble, noting that companies like Microsoft, Google and Meta are funding firms such as Anthropic and OpenAI, generating revenue growth. He concluded that the Iran war’s energy shock will eventually subside, easing pressure on the economy.