(Bloomberg) -- US Treasury Secretary Scott Bessent said he favors a strong dollar and has no plans to alter the government's debt-issuance plans, showing a cautious approach toward financial markets from an administration that's elsewhere rapidly upending the status quo.
During the election campaign, President Donald Trump expressed concern about the strength of the dollar, given that it makes US products more expensive overseas. And Bessent criticized the debt policies of his predecessor, Janet Yellen, by saying she was financing the deficit with a lot of short-dated debt to keep the pressure off longer-term interest-rates and spur the economy.
But in an interview Thursday, Bessent indicated he has no imminent plans to break from previous currency and debt-sales policies, both of which are being closely watched in financial markets.
"The trajectory is good and the government is well financed," Bessent said in an interview with Bloomberg's Saleha Mohsin, referring to the pace of government debt sales. "I believe that as it becomes apparent that the president's agenda is working, that we'll see a great deal of non-inflationary growth, and I think that that will help us calibrate what that policy should be. But I don't foresee any changes in the issuance for the foreseeable future."
The dollar and Treasuries were little changed Thursday after Bessent's remarks, with 10-year yields ending the session up slightly.
The US currency has surged sharply against its major peers since Trump's election on speculation that his tax-cut and tariff plans would fan inflation pressures in the economy and keep interest-rates elevated.
While that's likely to curb exports — and reduce the value of US companies' earnings abroad — Bessent said there are no plans to push for a weaker dollar. Instead, he said he's reviewing whether other countries are trying to get an edge by driving down the value of their currencies.
"The strong-dollar policy is completely intact with President Trump," Bessent said. "We want the dollar to be strong. What we don't want is other countries to weaken their currencies, to manipulate their trade."
The comments mark a rare bit of continuity for an administration that's been rapidly moving to reshape Washington and undo policies enacted under former President Joe Biden. Those include Elon Musk's cost-cutting efforts, which are threatening to gut key agencies and slash the federal workforce.
The embrace of a weaker currency — or any plans to step up sales of longer-term debt — would likely have rattled financial markets. While the dollar has dipped in recent days, it remains not all that far from its 2022 highs and Treasuries have gained this month on signs that the economy is cooling.
Sentiment for longer-dated bonds was also bolstered by the Treasury Department's quarterly supply announcement on Wednesday, which suggested increases remain several quarters away. It was the first such announcement under Bessent's stewardship.
Before he was picked to lead the Treasury, Bessent was one of a number of Republicans who charged Yellen with artificially holding down sales of longer-maturity Treasuries — which affect things like mortgage rates — to boost the pre-election economy.
But in the interview, he said the direction of federal borrowing was one positive holdover from his predecessor.
"The good news is that the trajectory of the borrowing is dropping," Bessent said. "I was very happy to see that. It was one of the few good surprises I was left from the previous administration."
--With assistance from Michael Mackenzie.
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