Bessent touts Trump-era bond market as 10-year yield spikes

Treasury Secretary Scott Bessent boasted Tuesday that the U.S. bond market has outperformed the rest of the world since President Donald Trump’s return to office. But he made his comments as 10-year Treasury yields rose to their highest level in nearly 20 months amid a global bond selloff that has raised fears about a repeat of the 1997 Asian financial crisis.

“It’s been the best-performing bond market among major countries in the world,” Bessent asserted during a “fireside chat” with Fox Business host Larry Kudlow at the Group of 20 finance meeting in Asheville, North Carolina.

The hedge-fund veteran and Cabinet secretary chose a starting point for his analysis that downplayed the bond market’s reaction to Trump’s presidency. Markets anticipate future events, and investors who began to price in the possibility of a Trump victory started selling off U.S. government debt well ahead of his Jan. 20, 2025, inauguration. Accounting for that context, the U.S. bond market has performed in the middle of the pack over the past two years.

Bessent and Trump have repeatedly made assertions about market performance and the U.S. economy that either skirt the truth or defy reason. Trump on Monday told reporters that, if not for the hindrance of too-high interest rates, the U.S. economy could grow at rates as high as 20%. But such a figure has only been reached once since World War II — and that was during the post-Covid rebound that followed a historic economic contraction.

On Monday, Bessent told CNBC’s Sara Eisen the benchmark 10-year yield is “flat since President Trump came in,” a sign of stability in the market. In reality, the 10-year is up about 18 basis points since Trump’s second inauguration.

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

To be sure, the shift in the U.S. 10-year yield is smaller than what other top economies, including the other members of the G7 alliance, have experienced since January 2025, according to CNBC’s analysis.

But U.S. bond yields, which trade in anticipation of future events, had already been on the rise before the 2024 election. The 10-year Treasury rose by nearly a full percentage point from a low in mid-September 2024 until Inauguration Day, as traders priced in the possibility of faster growth, rising inflation and more debt.

Bessent in Tuesday’s remarks downplayed short-term bond moves as he touted the U.S. market, telling Kudlow, who chaired the White House National Economic Council during the first Trump administration, “what happens over a month doesn’t matter.”

“If there were a problem in the U.S. bond market … then people would be selling U.S. bonds and buying other countries’ bonds,” Bessent told CNBC Monday. “But we are the best-performing market.”

Government bond yields broadly rose across global markets on Tuesday, with some countries seeing borrowing costs hit multi-decade highs.

Uncertainty over the Fed’s policy direction dovetailed with increased geopolitical turmoil — especially in Iran, where U.S. military strikes around the Strait of Hormuz recently resumed after a hiatus. The conflict has raised oil prices, stoking inflation concerns and adding upward pressure on bond yields.

Asked during a press gaggle later Tuesday morning about a spike in Japan’s 10-year yield, Bessent said it is “difficult to deconstruct all the aspects that are behind any financial market move, since it’s such a multivariable market.”

“We have seen kind of global the yield rise,” he added. But he noted that he has spoken with Japanese finance officials in recent days, and said, “I think that the Japanese are taking the right steps.”

Bessent did not respond to a shouted question about the rise in the U.S. 10-year yield.

— CNBC’s Megan Cassella contributed to this report.