Treasury Secretary Scott Bessent defended his intervention in the U.S. bond market on Tuesday, telling lawmakers that the decision to buy back American debt last week was successful, even as yields on 10-year Treasuries climbed higher in the wake of the purchases.
As Mr. Bessent testified before the House Financial Services Committee, the yield on the 10-year Treasury, which influences a wide range of borrowing costs, topped 5 percent and reached its highest level in 19 years.
Mr. Bessent suggested that bond yields might have crept even higher had he not intervened. He also sought to portray the Trump economy as delivering big gains to Americans, despite polls saying that voters are despondent about prices and the Iran war. Faced with repeated questions from Democrats about the high cost of living under President Trump, Mr. Bessent sought to blame inflation on the Biden administration even though Mr. Trump has been in office for nearly two years.
“I tell people I feel like an emergency room doctor for people who have been backed over by a truck,” Mr. Bessent said of the U.S. economy. “You had to stabilize the patient, and now the patient is up and able to walk and is going to get back on his or her feet.”
Mr. Bessent also echoed Mr. Trump’s promise to deliver a $5,000 dividend to Americans if Republicans retain control of Congress in the November midterm elections. The plan could add more than $1 trillion to the national debt and stoke inflation, but Mr. Bessent declined to offer details about where the money would come from or how it would help the economy at a moment when inflation remains elevated.
“I think putting more money in the American people’s pocket should be an objective for everyone, and I believe there are ways to do it that would not affect the deficit,” Mr. Bessent said.
When asked about whether such a plan would need the approval of Congress, Mr. Bessent said that the Treasury Department was studying that question and trying to determine where the money would come from.
“I’m not ready to discuss it at present, but at Treasury, we’ve been working on it for quite a while,” Mr. Bessent said.
The hearing, which turned tense at times, came as Mr. Bessent has been in the spotlight for intervening in financial markets in an effort to lower interest rates. The Treasury secretary acknowledged on Tuesday that the recent rise in yields reflects concerns about U.S. deficits, but he offered no plan for how to address them.
“We will be talking about a fiscal consolidation plan that is coming,” Mr. Bessent said, referring to a forthcoming government initiative to cut spending that he first referenced last month.
Mr. Bessent’s ambitions of spurring economic growth and reducing deficits have been undercut by Mr. Trump’s decision to start a war with Iran. The conflict has sent energy prices rising around the world, stoking inflation and forcing the U.S. to beef up military spending.
The Treasury secretary, who was heckled by protesters opposing the Iran war, sparred with lawmakers for three hours. When pressed by Democrats, he expressed doubts about their data, questioned their intelligence and said that signs of economic malaise were the results of former President Joseph R. Biden Jr.’s policies.
“Can I ask what’s the statute of limitations on the Joe Biden blame game?” Representative Ritchie Torres, Democrat of New York, asked. “Like when in doubt, blame Joe Biden. Is that the modus operandi of this administration?”
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