Investing.com -- U.S. Treasury Secretary Scott Bessent said the recent rise in Treasury yields largely reflects a broader global increase in borrowing costs and does not, by itself, warrant concern, even as inflation pressures and heavy government borrowing have pushed benchmark yields to multi-decade highs.
In an interview with Axios published on Saturday, Bessent said he would be more concerned if U.S. yields were rising for reasons specific to the country's financial markets. He pointed to the fact that investors were not simply shifting out of Treasuries and into German or Japanese government bonds, suggesting that the move reflected a broader repricing of global debt markets.
His comments come as investors assess whether elevated long-term yields represent a temporary adjustment or a more lasting shift toward a higher-cost global borrowing environment.
Bessent said the Treasury could not dictate where bond yields trade, but that policymakers could encourage investors to step back from short-term market moves and assess the wider economic picture.
Global bond markets have been under sustained pressure in recent months, with government borrowing costs rising across major economies. The U.S. 10-year Treasury yield recently climbed to its highest level since 2002, while yields in Europe and Japan have also reached multi-decade highs. Persistent inflation concerns, rising government debt and increased borrowing linked to artificial-intelligence infrastructure have contributed to the sell-off.
Higher energy prices linked to the prolonged U.S.-Iran conflict have added to concerns about inflation, while large technology companies have increasingly turned to debt markets to finance investments in data centers and other AI infrastructure. Mortgage rates have consequently remained above 7%, increasing borrowing costs for households.
Bessent also discussed U.S. involvement in efforts to support Japan's currency. Washington and Tokyo have coordinated in the foreign-exchange market, including a joint intervention aimed at supporting the yen.
Despite a softer-than-expected U.S. jobs report providing some relief to bond investors, the Treasury market has remained under pressure. The broader sell-off has reflected a mix of inflation risks, fiscal concerns, geopolitical uncertainty and the growing demand for capital to finance the AI buildout.
Bessent also rejected concerns that the rapid expansion of artificial-intelligence investment is necessarily creating a speculative bubble. He pointed to major technology companies such as Microsoft, Alphabet's Google and Meta Platforms, arguing that their heavy AI spending is being supported by substantial revenues and continued business growth.
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