‘Strong dollar is not a price on a screen’: Bessent defends US currency as global transactions rise

US Treasury Secretary Scott Bessent said on Tuesday (September 15) that the US dollar continues to thrive 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 is a set of behaviors,” Bessent said during testimony before the House Financial Services Committee. He said the Trump administration’s efforts to provide regulatory, tax, trade and energy certainty were attracting trillions of dollars into the United States.

Bessent says dollar remains dominant

Bessent said the increase in dollar-denominated transactions showed the “credibility of our system and what this administration is doing.”

He acknowledged that some countries have reduced their holdings of US dollar reserves, but said the decline was mainly driven by Russia and China.

“Dollar continues to thrive as reserve currency, transaction volume in dollars has risen,” Bessent said.

He argued that the strength of the dollar should not be assessed simply by its exchange-rate value, but also by global economic behaviour and demand for US financial assets.

‘Strong dollar’ linked to policy certainty

Bessent said the administration was creating greater certainty in several areas, including regulation, taxation, trade and energy.

“A strong dollar is a set of behaviors, including regulatory, tax, trade, energy certainty,” he said.

According to Bessent, these policies were helping attract large amounts of capital to the US.

Bessent comments on rising bond yields

US 10-year treasury yield tops 5%

Government borrowing costs surged to their highest level since the 2008 financial crisis on Tuesday, with the US 10-year Treasury yield climbing above 5% as rising oil prices, inflation concerns and mounting global debt weighed on bond markets.

The average 10-year government bond yield across the Group of Seven (G7) economies reached 4.285%, its highest level since mid-2008 and about one percentage point above its level before the start of the Iran war.

The US 10-year Treasury yield briefly climbed to 5.041% on Tuesday, its highest since 2007, before easing back to around 5%.

Bessent also addressed the recent rise in US bond yields, attributing higher yields to “global issues” without providing further details on specific causes.

Bessent also told lawmakers that the US would have continued its fiscal contraction this year if not for tariff refunds.

He said the administration could begin paying down US debt once the deficit-to-GDP ratio reaches 3%.

Global bond yields surge

The rise in US yields came as borrowing costs climbed across major economies.

Japan's 10-year government bond yield rose above 3%, reaching a three-decade high.

Germany's 10-year benchmark 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's 10-year yield reached 5.45%, its highest since 2007.

The broad rise highlights concerns over the sustainability of government debt as borrowing costs increase.

US pushes for debt transparency over China

Bessent said the Treasury would continue pressing for greater transparency in debt restructuring, citing concerns over what he described as hidden Chinese debt provisions.

He also said the administration had held private discussions with China regarding Iranian financial links.

Iran war disrupts hearing

The hearing was briefly disrupted by protesters calling for an end to US sanctions on Iran and the war.

Several protesters stood up one after another during Bessent’s opening statement, forcing him to stop and restart his remarks. They were subsequently removed from the hearing room.

The House Financial Services Committee hearing was formally focused on the international financial system, including reforms to the International Monetary Fund and World Bank. However, lawmakers were also expected to question Bessent about 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 would continue at a summit later this month.