U.S. Treasury Secretary defends dollar hegemony amid rising yields

U.S. Treasury Secretary Scott Bessent has defended the global dominance of the dollar, noting it accounts for 89.2% of foreign exchange transactions. Bessent argued that the rise of stablecoins, which are largely pegged to the dollar, serves as a digital extension of U.S. monetary influence rather than a threat.

This defense comes as the 10-year U.S. Treasury yield has surpassed the 5% threshold, sparking market concerns regarding fiscal deficits and inflation. While some critics suggest the Treasury is intervening in the bond market to suppress yields, Bessent clarified that bond buybacks are intended for liquidity management and maturity structure oversight rather than controlling the $30 trillion debt market.

Market analysts are monitoring whether yields could reach 6%, a level that could significantly increase borrowing costs for mortgages and corporate financing, while putting pressure on high-valuation technology stocks. Despite the rise of alternative payment systems and BRICS-led initiatives, Bessent maintains that current economic indicators, including job growth and household income, support the dollar's stability.