Bessant: Supports the "$5,000 check," will not increase the deficit; House Speaker: The plan will take time to be implemented.

U.S. Treasury Secretary Bessenter expressed support for a proposal to issue $5,000 checks to American adults, while downplaying concerns about the fiscal costs. This statement comes at a time when the U.S. national debt continues to balloon and financial markets are increasingly uncertain about the fiscal outlook.

During his testimony before Congress on Tuesday, Bessant said there were "ways" to implement the plan without increasing the deficit, but did not disclose specific cost offsetting measures. He said the Treasury Department had been studying the matter "for quite some time" and emphasized that "putting more money into Americans' pockets should be everyone's goal."

In Congress, House Speaker Mike Johnson said on Tuesday that he had spoken with the president on the issue the previous night, but specific details were "not yet finalized" and the plan "will take some time" to be implemented. Johnson did not give clear answers to questions regarding whether checks would have an income cap, whether it would increase federal debt, or whether legislation could be completed this year.

Republican Senate Majority Leader John Thune said Tuesday that financial market dynamics and the trajectory of U.S. debt are "really worrying." He called for caution in spending decisions and sought ways to curb the growth of government spending, but did not endorse the $5,000 check plan.

The proposal is currently projected to cost over $1 trillion, while the U.S. fiscal deficit this year is already close to $2 trillion. Meanwhile, driven by surging capital investment and soaring energy prices, global bonds experienced a massive sell-off, with the 10-year U.S. Treasury yield rising above 5% again on Tuesday, reaching a near two-decade high.

Bessant stated that it would not affect the deficit, but details remained questionable.

During a congressional hearing on Tuesday, Bessant made it clear that he supports Trump's $5,000 "dividend check" plan, which he promised last week.

He said that if advancing the proposal requires congressional authorization, he would work with House Speaker Mike Johnson to push for it, calling the president's intentions "very real."

However, Bessant did not provide any details on how the related expenditures would be offset. He only stated that the Treasury had studied the plan for "considerable time," leaving market questions about the source of the costs unresolved.

In an interview last week, Trump suggested that he believed issuing checks "may not require congressional approval at all," but Republican members of Congress have not yet made a clear statement on the matter.

Debt pressure: The 40 trillion yuan threshold and the 5% yield serve as a warning.

The U.S. national debt surpassed $40 trillion last month, sparking broader concerns about the long-term fiscal sustainability of the United States.

Meanwhile, the yield on 10-year U.S. Treasury bonds rose above 5% on Tuesday, reaching its highest level in nearly two decades, marking the latest milestone in the current global bond sell-off—driven by a capital investment boom and soaring energy prices, which has further exacerbated inflationary pressures.

Against this backdrop, Bessant's promise that the $5,000 check "would not affect the deficit" left the market with little basis for its claim.

The estimated cost of over $1 trillion, combined with the current annual fiscal deficit of approximately $2 trillion, means that investors will be closely scrutinizing the potential impact of any new spending measures on the trajectory of the U.S. debt.

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