Following weeks of speculation about whether President-elect Donald Trump would select a political animal or a wolf of Wall Street to sit at the helm of America’s most important financial and economic institution, he settled on hedge fund manager Scott Bessent as his pick for Treasury Secretary.
Trump announced the pick on Friday evening, calling Bessent “a strong advocate of the America First Agenda.”
“On the eve of our Great Country’s 250th Anniversary, he will help me usher in a new Golden Age for the United States, as we fortify our position as the World’s leading Economy, Center of Innovation and Entrepreneurialism, Destination for Capital, while always, and without question, maintaining the U.S. Dollar as the Reserve Currency of the World,” he said in a statement.
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“Unlike in past Administrations, we will ensure that no Americans will be left behind in the next and Greatest Economic Boom,” he added.
Bessent’s name has hovered at the top of the incoming president’s shortlist for some time, raising a few eyebrows given that the Key Square Group founder spent more than a decade working for Democratic megadonor George Soros, even acting as Soros Fund Management’s chief investment officer. When Bessent left to start his own gig in 2015, Soros invested $2 million in the new venture.
But the billionaire CEO has been amenable to the key elements of Trump’s economic agenda—namely, tariffs and tax cuts.
Last week, Bessent wrote in a Fox News op-ed that the incoming administration’s proposed tariffs would help bring in revenue for the federal government, while helping Trump achieve foreign policy objectives by serving as a point of leverage.
Like Trump, he believes that the decades-long trend toward free trade and globalization has allowed China to ascend to prominence as the world’s preeminent producer. “In the interim, we’ve hollowed out our manufacturing base, leaving a trail of devastation through swathes of our country’s heartland,” he wrote.
“The U.S. opened its markets to the world, but China‘s resulting economic growth has only cemented the hold of a despotic regime,” he added. “Tariffs are a means to finally stand up for Americans.”
Bessent expressed confidence that Trump would waste no time in implementing “a growth agenda” when he’s sworn in.
“Tariffs are going to be part of that,” he said during a recent interview with Fox Business reporter Mario Bartiromo. “Alexander Hamilton loved tariffs. He was the original tariff man, and he did it to raise revenues and to protect American industry,” he added. “Donald Trump has added the negotiating leg. And I think given Donald Trump’s credibility on tariffs from Trump 1.0, he will hit the ground running on 2.0 and world leaders and business executives will know he means business.”
One day after Trump tapped him for the Treasury, Bessent appeared to make an appeal to Americans who are wary of any plan that might agitate inflation. He told former Trump National Economic Council director Larry Kudlow that “tariffs can’t be inflationary.”
“The inflation comes through either increasing the money supply or increasing the government spending, and that’s what happened under Biden,” he said on Kudlow’s podcast.
Tariffs are a central tenet of the Trump economic and foreign policy doctrine, but Bessent will also be key to navigating and executing on critical domestic tax policy objectives if his appointment is confirmed.
As Treasury Secretary, he will work with the incoming president on extending $4 trillion in Tax Cuts and Jobs Act (TJCA) provisions that expire at the end of next year.
Passed during Trump’s first term, the law cut the corporate tax rate to 21 percent—a rate Trump said he’d slash even further to 20 percent for most firms and 15 percent for those that make their products in the U.S.
If TCJA is extended, taxpayers earning in excess of $450,000 per year will continue to benefit most, while middle-class earners making between $65,000 and $116,000 might see a modest tax cut or none at all.
“Mr. Trump has a mandate to reprivatize the U.S. economy through deregulation and tax reform to spur the supply-side growth that he delivered in his first term,” Bessent wrote in a Wall Street Journal op-ed on Nov. 10. “That will be essential to restarting the American growth engine, reducing inflationary pressures, and addressing the debt burden from four years of reckless spending.”
Wall Street, for its part, is already demonstrating confidence in the pick. On Monday morning, stock futures rose, with the Dow Jones Industrial Average climbing 275 points (0.6 percent), after closing last week up 426 points (1 percent). S&P 500 futures were up 0.4 percent Monday, while Nasdaq 100 futures were up 0.5 percent.
“Markets reacted positively to U.S. President-elect Trump nominating the financier Bessent as treasury secretary. Investors prefer orthodoxy, predictability, and coherence from economic policy; there were fears that some of the candidates may not possess those attributes. Bessent does,” wrote Chief Economist of UBS Global Wealth Management Paul Donovan on Monday morning.
“Bessent has said he regards taxing U.S. consumers via trade tariffs as a bargaining tool—essentially the stance in Trump’s first term. Others in the cabinet disagree, but investors will be pleased there is one voice of trade tax moderation.”
