Bessent Rejects AI Liability Shield as 10-Year Yield Hits 5%
Treasury Secretary Bessent refused to grant AI firms legal protection while defending bond buybacks against rising yields.
Key points
- Treasury Secretary Bessent stated AI firms must assume full legal responsibility without federal liability shields.
- The 10-year Treasury yield exceeded 5% for the first time since 2007, a gain of 100 basis points.
- The Federal Reserve raised its benchmark interest rate to 3.75% to 4% in September to combat inflation.
Treasury Secretary Scott Bessent stated that artificial intelligence developers must assume full legal responsibility. He explicitly rejected industry requests for a federal liability shield.
Bessent emphasized that humans remain accountable for AI actions, not the machines themselves. This stance pushes back against key demands from major technology firms.
AI Developers Must Own Their Legal Risks
The Secretary told CNBC that companies need to take responsibility for their own products. He argued that federal protection from legal liability is not an appropriate policy goal.
This position contrasts with some industry leaders who seek regulatory clarity. Bessent’s comments align with a broader push for corporate accountability in emerging sectors.
Bond Yields Reach Highest Level Since 2007
The 10-year Treasury yield climbed above 5% last week for the first time since 2007. This marked a gain of roughly 100 basis points since late February.
Home loan rates also climbed above 7% this month. This level had not been seen in over a year, increasing borrowing costs for consumers.
Fed Hikes Rates Despite Presidential Opposition
The Federal Reserve raised its benchmark rate target to 3.75% to 4% on September 16. This was the first rate hike since 2023, aimed at curbing elevated inflation.
President Trump, who appointed the Fed Chair, had previously called for rate cuts. However, the committee voted to increase rates despite his public preference.
Bessent defended the Treasury’s recent purchase of over $5 billion in long-term bonds. He claimed the operation prevented yields from rising even higher. According to qz.com, he maintained this defense during his Monday appearance.
