‘Strong dollar not price on screen’: Bessent defends US currency as global transactions rise | Today’s news
US Treasury Secretary Scott Bessent said on Tuesday (15 September) that the US dollar continues to do well as the world’s reserve currency, pointing to rising global transaction volumes as evidence of continued confidence in the US financial system.
“A strong dollar is not a price on a screen, it’s a set of behaviors,” Bessent said during testimony before the House Financial Services Committee. He said the Trump administration’s efforts to ensure regulatory, tax, trade and energy certainty are attracting trillions of dollars to the United States.
Bessent says the dollar remains dominant
Bessent said the increase in dollar transactions showed “the credibility of our system and what this administration is doing.”
He admitted that some countries had reduced their holdings of US dollar reserves, but said that the decline was mainly caused by Russia and China.
“The dollar continues to do well as a reserve currency, with dollar transactions increasing,” Bessent said.
He argued that the strength of the dollar should not be judged only by its exchange rate, but also by global economic behavior and demand for US financial assets.
A “strong dollar” coupled with policy certainty
Bessent said the administration is creating more certainty in several areas, including regulation, tax, trade and energy.
“A strong dollar is a set of behaviors, including regulation, taxes, trade, energy security,” he said.
According to Bessent, these policies helped attract large amounts of capital to the US.
Bessent comments on rising bond yields
10-year US Treasury yields exceed 5%
Government borrowing costs rose to their highest level since the 2008 financial crisis on Tuesday, with the yield on the 10-year U.S. Treasury note climbing above 5% as rising oil prices, inflation concerns and rising global debt weighed on bond markets.
The average 10-year government bond yield in the Group of Seven (G7) economies reached 4.285%, the highest level since mid-2008 and about one percentage point above the level before the start of the Iran war.
The 10-year U.S. Treasury yield briefly rose to 5.041% on Tuesday, the highest since 2007, before easing back to around 5%.
Bessent also addressed the recent rise in US bond yields, attributing the higher yields to “global emissions” without providing further details on the specific causes.
Bessent also told lawmakers that the U.S. would have continued its fiscal contraction this year if not for the rollback of tariffs.
He said the administration could begin paying down the U.S. debt once the deficit-to-GDP ratio reaches 3%.
Global bond yields are rising sharply
The rise in US yields came with a rise in borrowing costs across major economies.
Japan’s 10-year government bond yield rose above 3% to a three-decade high.
Germany’s benchmark 10-year yield was near its highest level since 2009 at 3.55%, while France’s 10-year yield hovered near an 18-year high.
The UK 10-year yield hit 5.45%, the highest since 2007.
The broad-based increase highlights concerns about the sustainability of government debt as borrowing costs rise.
US pushes for debt transparency in China
Bessent said the Treasury Department would continue to push for more transparency in debt restructuring, citing concerns about what he described as hidden provisions on China’s debt.
He also said the administration has been in private discussions with China regarding Iran’s financial ties.
The Iran war is deafening
The hearing was briefly interrupted by protesters calling for an end to US sanctions on Iran and the war.
Several protesters stood up one by one during Bessent’s opening statement, forcing him to stop and repeat his remarks. Subsequently, they were taken out of the meeting room.
The House Financial Services Committee hearing formally focused on the international financial system, including reforms to the International Monetary Fund and the World Bank. But lawmakers were also expected to question Bessent on rising global bond yields and the administration’s financial measures against Iran.
Bessent said President Donald Trump’s discussions with Chinese President Xi Jinping on Iran will continue at a summit later this month.
Read also | Bessent Doubles Down on House of the Rising Sun
