Bessent Defends Treasury Intervention Amid Bond Sell-Off. Democrats Question Trump’s Economic Comeback Claims.

Treasury Secretary Scott Bessent defended the Trump administration's economic record and his department's actions in financial markets during a combative House hearing Tuesday as Democratic lawmakers challenged him over rising borrowing costs, energy prices and the state of the U.S. economy ahead of the midterm elections.

The hearing before the House Financial Services Committee was formally focused on oversight of the International Monetary Fund, but quickly turned into a broader political debate over President Donald Trump's economic agenda, inflation pressures and Treasury policy.

"You go on television and you say Trump's economic agenda is a great comeback," Rep. Ayanna Pressley, D-Mass., told Bessent during the hearing. "That makes me question not only your integrity, but if you're operating in the same reality as the people whom you are accountable to."

Bessent pushed back, defending his economic outlook and arguing that the administration's policies had strengthened the economy despite challenges from global markets and geopolitical conflicts.

The exchange became increasingly tense as lawmakers interrupted Bessent's responses and demanded direct answers to questions. The hearing was also disrupted by protesters objecting to U.S. sanctions policies involving Iran and Cuba.

A major focus of the hearing was the recent rise in Treasury yields, which has increased concerns about the cost of borrowing for households and businesses. The yield on the 10-year Treasury note traded around 5% Tuesday, briefly reaching its highest level since 2007. Higher Treasury yields have contributed to pressure on mortgage rates, with the average 30-year fixed mortgage rate recently rising above 7%.

Democratic lawmakers questioned whether Treasury's intervention in the bond market had been effective. The department had increased purchases of certain long-term Treasury bonds it considered mispriced, a move intended to support market stability.

Rep. Maxine Waters, D-Calif., the ranking Democrat on the committee, argued that Treasury's efforts had not stopped the sell-off in government bonds. "Despite your feeble efforts, there continues to be a sell-off of U.S. Treasuries," Waters told Bessent.

Bessent defended the strategy, saying critics were overlooking the potential alternative scenario if the Treasury had not acted. He argued that yields would have climbed even higher without the intervention. "There was the counterfactual of what it would have done," Bessent said. "And then we proceeded to have two of the most successful bond Treasury auctions that we've had in 20 years."

The Treasury secretary also said reducing the federal deficit would be an important factor in lowering long-term interest rates. "I believe that the 10-year yield reflects many things, but the need to address the deficit is one of those," Bessent said.

Rising oil prices were another major economic concern discussed during the hearing. Crude oil prices have moved above $100 a barrel as hostilities in the Middle East continue to escalate, putting additional pressure on gasoline and diesel prices for American consumers.

The hearing also moved into the debate over artificial intelligence and national security. Bessent argued that Chinese technology companies represent a significant challenge for the United States and raised concerns about foreign AI systems and cybersecurity risks.

He also criticized proposals that would provide liability protections for major AI companies, arguing that regulation should not allow large technology firms to gain excessive influence over government policy. "We need to develop more open source models in the U.S.," Bessent said. "We can't let these large labs capture, have regulatory capture."