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U.S. Treasury Secretary Scott Bessent defended several economic policies from the Trump administration during a hearing before the House Financial Services Committee on Tuesday. Among the topics discussed were currency and bond market interventions, as well as artificial intelligence safety. Bessent also disclosed plans to meet with his Chinese counterpart this weekend.

During the hearing, Bessent addressed rising bond yields, attributing the increase to "global issues," including higher oil prices and expectations of a Federal Reserve rate hike. Despite this, Bessent claimed that the Treasury's decision to double the size of longer-term debt buybacks had been successful in preventing further yield increases and underscored U.S. credibility. He noted that the two most successful Treasury auctions in 20 years were achieved since President Trump's administration took office.

Bessent defended the Treasury's joint intervention with Japan to support its currency, stating that the U.S. purchased a nominal amount of yen to signal support for Japanese policies, while reaping tens of millions of dollars in the process. He argued that a stronger yen benefits American exports and alleviates the need for the Japanese government to sell U.S. assets to finance foreign currency intervention.

Several Democratic lawmakers pressed Bessent on the state of the economy, inflation, and the rising cost of living, tying these issues to the ongoing Iran war and the surge in global oil prices. Bessent blamed the previous Biden administration for the inflation and claimed that Americans are better off under Trump. He pointed to recent Census Bureau data showing that the percentage of Americans in poverty had decreased by 0.5 percentage point to the lowest rate on record, with 34.5 million Americans now in poverty. Additionally, median household income had increased by 2.6% to a record $87,460.

When asked about Trump's proposal to pay each American $5,000 if the Republican Party maintained congressional majorities in the upcoming elections, Bessent indicated that he would collaborate with House Speaker Mike Johnson to implement this plan if congressional approval were necessary. Bessent also commented on the strength of the U.S. dollar, attributing it to the Trump administration's credibility and the creation of regulatory, tax, trade, and energy certainty, which have attracted trillions of dollars into the U.S. He noted that the administration was working on AI safety continuously and emphasized the importance of holding AI labs accountable for their creations, while also underscoring the need to stay ahead of China in the AI development race.