Iran conflict triggers energy shocks and inflation concerns, bond yields rise. Bessant states that the current high yields are temporary and related to inflation, and will decline once the conflict subsides and shipping lanes are restored. He said in a G7 speech in Paris that central bank officials' concerns are much stronger than his, and tough rhetoric is not necessary; he mentioned McLemore's comment that the situation is severe, and if demand falls, interest rates could be cut; he does not need to speak out deliberately, as energy prices will eventually normalize.

K-LinePoet

2026-05-21 00:05:49

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The energy shocks triggered by the Iran situation, growing concerns about inflation, and cooling expectations of rate cuts have made bond investors and central bank officials around the world feel tense. However, U.S. Treasury Secretary Scott Bessent stated that he believes the currently elevated bond yields and overall inflation are temporary phenomena and will gradually decline once related conflicts subside. Bessent said in an interview with the media this week that at the G7 finance ministers' meeting in Paris, the concerns among central bank officials about inflation and the bond market sell-off were much stronger than his own. "As a central bank official, expressing concerns is part of my duty," Bessent said. "The more forceful the rhetoric, the less necessary it is to actually take regulatory measures." He mentioned that Bank of Canada Governor Tiff Macklem admitted that the current situation is severe, and the central bank may be forced to raise interest rates, but if market demand weakens later, they can quickly switch to rate cuts. "And I don't need to deliberately issue tough statements; these fluctuations are only temporary," Bessent said. "Conflicts will eventually come to an end, and once shipping lanes are restored, energy prices will return to normal."

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U.S. Treasury Secretary Bessent says that high bond yields and high energy prices are temporary factors and will fall after the end of the Iran conflict.

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