Bessent Says Bond Sell-Off Reflects Stronger U.S. Growth Outlook

According to Axios, U.S. Treasury Secretary Scott Bessent said Tuesday that the bond sell-off and higher interest rates are largely being driven by stronger U.S. growth prospects, not rising inflation expectations. Speaking at a G20 finance ministers meeting in Asheville, North Carolina, Bessent said inflation expectations are “flat-to-down” and argued that growth is reaccelerating, while also acknowledging the move is a global phenomenon that has intensified during the gathering. He said Japan’s 10-year yield hitting 3% for the first time in three decades reflects both global market forces and Japanese policies that helped the country emerge from decades of deflation. European Union commissioner Valdis Dombrovskis said the sell-off shows governments need to get deficits under control and that any fiscal support tied to the Middle East conflict should be temporary and targeted. Former U.S. Treasury official Joe Lavorgna told Axios that faster growth is necessary for an improved fiscal situation, but questioned whether it is sufficient.