Bessent touts 10-year bond yields soaring in Trump-era bond market

Treasury Secretary Scott Bessent boasted Tuesday that the U.S. bond market has outperformed the rest of the world since President Donald Trump returned to office. But his comments came amid a global bond sell-off that raised concerns about a repeat of the 1997 Asian financial crisis and as 10-year U.S. Treasury yields rose to their highest level in nearly 20 months.

“The bond market is the strongest bond market in any major country in the world,” Bessent asserted during a “fireside chat” with Fox Business host Larry Kudlow at the G20 financial meeting in Asheville, North Carolina.

The hedge fund veteran and Cabinet secretary chose to start his analysis by downplaying the bond market’s reaction to Trump’s inauguration. Markets were anticipating future events, and investors began selling U.S. Treasuries well before Inauguration Day on January 20, 2025, as they began pricing in the possibility of a Trump victory. Given that context, the U.S. bond market has been in the middle of the market for the past two years.

Mr. Bessent and Mr. Trump have repeatedly made claims about market trends and the U.S. economy that avoid truth or defy reason. President Trump told reporters on Monday that the U.S. economy could grow at rates as high as 20% if not hampered by too high interest rates. But such numbers have only been reached once since World War II, and that was during the post-COVID-19 recovery following a historic economic contraction.

On Monday, Bessent spoke to CNBC’s Sarah Eisen about the benchmark. 10 year yield has been “flat since President Trump took office,” a sign of market stability. In fact, the 10-year has risen about 18 basis points since President Trump’s second term in office.

Bessent has made similar comments throughout the two-day G20 meeting, where he and Federal Reserve Chairman Kevin Warsh have been focused on finding ways to boost economic growth.

Indeed, the change in the U.S. 10-year Treasury yield is smaller than what other major economies, including other members of the G7 alliance, have experienced since January 2025, according to a CNBC analysis.

But U.S. Treasury yields, which trade in anticipation of future events, were already trending higher before the 2024 election. The 10-year Treasury note rose nearly 1 percentage point from its mid-September 2024 low to Inauguration Day as traders priced in faster growth, higher inflation and the possibility of higher debt.

Mr. Bessen downplayed trends in short-term bonds in his remarks Tuesday, touting the U.S. market to Mr. Kudlow, who served as chairman of the White House National Economic Council during the first Trump administration, saying, “It doesn’t matter what happens in a month.”

“If there is a problem in the U.S. bond market…people will sell U.S. bonds and buy bonds from other countries,” Bessent told CNBC on Monday. “But we are the best-performing market.”

Government bond yields rose broadly in global markets on Tuesday, with borrowing costs in some countries seen reaching multi-decade highs.

The uncertainty surrounding the Fed’s policy direction coincides with increasing geopolitical turmoil, particularly in Iran, where U.S. military strikes in the Strait of Hormuz have recently resumed after a hiatus. The dispute has pushed up oil prices, raised inflation concerns and put upward pressure on bond yields.

Asked about the spike in Japan’s 10-year bond yield at a news conference late Tuesday morning, Bessent said, “It’s difficult to dismantle all the aspects behind financial market movements because financial markets are very diverse markets.”

He added: “We have seen yields rise globally.” But he noted that he had met with Japanese finance officials in recent days and said, “I think the Japanese side is taking the right steps.”

Mr. Bessent did not respond to a barrage of questions about the rise in the 10-year U.S. Treasury yield.

—CNBC’s Megan Cassella contributed to this report.