US Treasury Secretary Scott Bessent | Photo Credit: TOM NICHOLSON

The ⁠Iran war energy shock, growing inflation concerns and fading interest rate-cut hopes may have bond investors and central bankers on edge ‌but US Treasury Secretary Scott Bessent said he views elevated yields and headline inflation as "transient," ‌subsiding when the conflict ends.

Bessent told Reuters in ‌an ⁠interview on Tuesday that central bankers at a ⁠G7 finance leaders meeting in Paris voiced more concern than he did about inflation and a bond market sell-off.

"I think ​if you're a central ‌banker, you're supposed to say that you're concerned about it," Bessent said. "The tougher you talk, the less you have to do about it." He said that ‌Bank of Canada Governor Tiff Macklem described ​a "tough" situation where central bankers could be pushed into having to raise rates, but ⁠then pivot quickly to rate cuts if demand softens.

"From my point of view, I don't have to talk ‌tough. Nothing seems more transient than this," Bessent said. "This conflict will end one day. The strait will open, and we'll normalise energy prices."

The benchmark 10-year Treasury yield traded at 4.671 per cent on Wednesday after reaching its highest level since January 2025, while the 30-year Treasury ‌bond yield was hovering near its highest since June 2007 ​at 5.178 per cent.

Bessent said that oil markets were already looking through the conflict, with benchmark Brent ⁠crude futures for July delivery at $105 a barrel but $88 for ⁠December delivery.

"I think headline will be high as long as the conflict's going," Bessent said. "I ‌don't think that that will leak into core through three or four months out, so I ​think core was already coming down."

Published on May 21, 2026