What higher interest rates are telling us
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U.S. Treasury Secretary Scott Bessent argues that rising interest rates primarily signal stronger U.S. growth prospects rather than inflation concerns, though European officials warn that fiscal deficits remain a pressing challenge for governments worldwide.
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What higher interest rates are telling us
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*Data: Federal Reserve; Chart: Neil Irwin/Axios*
The bond sell-off and the resulting higher interest rates are largely a story of higher growth prospects in the United States, Treasury Secretary Scott Bessent argued Tuesday.
* "If we look at the composition of the bond yields — inflation expectations are flat-to-down," he said in a fireside chat at this week's G20 meeting of global finance ministers in Asheville, North Carolina. "This is a growth story. Growth, I believe, is reaccelerating."
* "We had some very good discussions here over the past few days and everyone agreed that growth has been better than they thought it would have been, given the Iran conflict."
**Zoom out:** Speaking to reporters later on Tuesday, Bessent acknowledged that the bond sell-off was a global phenomenon — one that has intensified as top finance ministers gathered in Asheville.
* Japan's 10-year yield hit 3% for the first time in three decades.
* Asked by Axios how much Japan and other global forces were contributing to the move, Bessent said it was "very difficult to deconstruct" what's behind any individual market move.
* Bessent said Japanese officials are "taking the right steps" and argued that higher yields partly reflect the success of policies that helped Japan emerge from a decades-long deflationary trap.
**Reality check:** In trying to stabilize debt-to-GDP ratios, growth is welcome; it makes the denominator bigger. But for many countries, the path to fiscal sustainability still likely runs through deficit reduction, reducing the numerator.
* EU commissioner Valdis Dombrovskis told reporters Tuesday morning that the bond sell-off reflects the reality that governments need to get deficits under control.
* He added that any fiscal support to reduce strains from the Middle East conflict should be "temporary and targeted," rather than piling on new budget strains.
**What they're saying:** "Faster growth is necessary for an improved fiscal situation. The real question is: Is it sufficient? We could debate that," former U.S. Treasury official Joe Lavorgna told Axios on the conference sidelines.
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4 hours ago - Economy
What higher interest rates are telling us
* Courtenay Brown ,
* Neil Irwin
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*Data: Federal Reserve; Chart: Neil Irwin/Axios*
The bond sell-off and the resulting higher interest rates are largely a story of higher growth prospects in the United States, Treasury Secretary Scott Bessent argued Tuesday.
* "If we look at the composition of the bond yields — inflation expectations are flat-to-down," he said in a fireside chat at this week's G20 meeting of global finance ministers in Asheville, North Carolina. "This is a growth story. Growth, I believe, is reaccelerating."
* "We had some very good discussions here over the past few days and everyone agreed that growth has been better than they thought it would have been, given the Iran conflict."
**Zoom out:** Speaking to reporters later on Tuesday, Bessent acknowledged that the bond sell-off was a global phenomenon — one that has intensified as top finance ministers gathered in Asheville.
* Japan's 10-year yield hit 3% for the first time in three decades.
* Asked by Axios how much Japan and other global forces were contributing to the move, Bessent said it was "very difficult to deconstruct" what's behind any individual market move.
* Bessent said Japanese officials are "taking the right steps" and argued that higher yields partly reflect the success of policies that helped Japan emerge from a decades-long deflationary trap.
**Reality check:** In trying to stabilize debt-to-GDP ratios, growth is welcome; it makes the denominator bigger. But for many countries, the path to fiscal sustainability still likely runs through deficit reduction, reducing the numerator.
* EU commissioner Valdis Dombrovskis told reporters Tuesday morning that the bond sell-off reflects the reality that governments need to get deficits under control.
* He added that any fiscal support to reduce strains from the Middle East conflict should be "temporary and targeted," rather than piling on new budget strains.
**What they're saying:** "Faster growth is necessary for an improved fiscal situation. The real question is: Is it sufficient? We could debate that," former U.S. Treasury official Joe Lavorgna told Axios on the conference sidelines.
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What to read next
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*
Smarter, faster on what matters.
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* About Axios
* Advertise with us
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* Contact us
* Newsletters
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Axios Media Inc., 2026
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Tags:#أسعار الفائدة#النمو الاقتصادي#الاقتصاد العالمي#السياسة المالية#الاحتياطي الفيدرالي#مجموعة العشرين
Source: Axios
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