What to watch as Treasury’s Bessent testifies before Congress

Treasury Secretary Scott Bessent will appear before the House Financial Services Committee on Tuesday for his annual testimony, where he will tout the success of the Iran war and rising wages for the lowest-income Americans. He will likely face questions about issues including inflation, energy prices, interest rates and the federal debt.

«The strength of our economy has allowed the United States to wage the greatest economic isolation campaign in the history of the world against the Islamic Republic of Iran and its enablers,» Bessent is expected to tell the committee, according to an advance copy of the Treasury secretary’s testimony obtained by CNBC.

Bessent’s testimony is formally part of Congress’ oversight of the International Monetary Fund, a Washington-based international organization that was established in 1944 to help ensure global financial stability. Bessent has criticized the organization as subject to mission creep, and his former chief of staff, Dan Katz, became its No. 2 official last year. The U.S. government’s priority is «ensuring that American time and resources serve American interests,» Bessent is expected to say.

Members of Congress are likely to use the secretary’s appearance to ask questions about other issues.

Democrats are likely to grill the Treasury secretary about the economy. Oil prices have risen above $100 a barrel as the Iran war has heated up again recently. That has pushed the price of gas in the U.S. to an average of $4.32 a gallon as of Monday, up $1.14 from a year ago, according to AAA. Diesel costs $6.23, up $2.54 over the past year. Bessent has been a full-throated supporter of the war. His department has ratcheted up sanctions on Iran and banks that facilitate its business.

Democrats may quiz Bessent about the pressure President Donald Trump is putting on Federal Reserve Chairman Kevin Warsh not to raise interest rates to deal with rising costs. The consumer price index is up 3.4% from a year ago, prompting investors to bet heavily on the Fed raising rates. Trump, by contrast, has said the Fed should cut rates. Bessent is a longtime friend of Warsh’s and by tradition meets weekly with the Fed’s top official.

Bessent may also face scrutiny for the administration’s fiscal track record. The national debt has ballooned past $40 trillion. The huge supply of debt combined with artificial intelligence spending and the surge in oil prices to hike funding costs for government debt. The 10-year Treasury note on Monday briefly hit 5.0% before settling. That yield also reflects some  investor optimism for U.S. growth, but it has the effect of making consumer debt more expensive. Bessent may be asked how the administration’s focus on affordability squares with a 30-year fixed mortgage rate average that topped 7% last week. 

Bessent and House Republicans can emphasize positive aspects of the Trump economy. Stocks have been volatile lately but remain near highs. The S&P 500 is up about 27% since Trump took office. 

The economy has also continued to produce jobs, while the administration slows immigration. Unemployment is low at 4.1%.

Bessent’s prepared testimony notes that wages for the bottom 25% of earners have risen faster than the top group of earners. More than 64 million tax returns have claimed one of the tax cuts passed last year, Bessent will say.

— Karen James Sloan contributed to this report.