Treasury Yields Hit 19-Year High as Bessent Faces Congress

Global markets are reeling as bond sell-offs intensify, with Japanese 10-year yields climbing back above 3%. The pressure on government debt stems from a combination of rising interest rate expectations and energy supply fears, as Brent crude pushed past $107 per barrel following heightened conflict in the Middle East. President Trump’s recent proposal for an energy infrastructure agreement between Russia and Ukraine has failed to provide lasting relief to oil markets.

Bessent’s testimony arrives at a critical juncture for the administration. Lawmakers are expected to grill the Treasury Secretary over the efficacy of recent market interventions, including joint efforts with Japan to support the yen and his unsuccessful attempts to cap Treasury yields. The committee will likely press him on the feasibility of the president’s $1.3 trillion cash injection plan, which includes $5,000 checks for Americans. Meanwhile, investors are bracing for a potential quarter-point rate hike from the Federal Reserve, with bond markets currently pricing in up to four increases over the coming year.

Tech stocks are also feeling the heat as a broader market retreat takes hold. The SOX semiconductor index dropped more than 5% on Monday, driven by cooling sentiment toward artificial intelligence and concerns over potential regulatory slowdowns. While Chinese industrial data showed signs of life in August, retail sales and stagnant housing prices suggest a fragile recovery. As the Fed begins its two-day policy meeting, all eyes remain on Washington to see if the administration can stabilize a jittery financial landscape.