On November 22, 2024, U.S. President-elect Donald Trump announced his nomination of prominent investor Scott Bessent as the Secretary of the Treasury of the United States. This nomination holds significant influence over the economy, regulations, and international affairs.
In a statement on Truth Social, Trump expressed his excitement about nominating Scott Bessent as the 79th Secretary of the Treasury of the United States. Trump described Bessent as one of the most important international investors and geopolitical and economic strategists in the world, widely respected for his advocacy of the “America First Agenda.”
Wall Street has been closely monitoring Trump’s choice for Treasury Secretary, especially considering his plans to reshape global trade through tariffs and potentially extend and expand the series of tax cuts implemented during his first term.
After days of consideration, Trump made this selection amidst a fluctuating list of candidates. Sources revealed that Bessent provided economic advice to Trump at Mar-a-Lago in Florida, which may have influenced the decision in his favor.
Other candidates that were mentioned included Marc Rowan, CEO of Apollo Global Management, and former Federal Reserve Governor Kevin Warsh. Investor John Paulson was initially a top contender but later withdrew, while Howard Lutnick, a seasoned Wall Street professional, was appointed as the Secretary of Commerce.
Regarding his appointment, Bessent did not immediately comment. However, as indicated in a recent opinion piece he wrote for The Wall Street Journal, Bessent has long advocated for tax reform and deregulation, particularly to stimulate increased bank lending and energy production.
Bessent emphasized that the market surge following Trump’s election victory signaled investors’ desire for higher growth, lower volatility, lower inflation rates, and overall economic revitalization for all Americans.
According to Ryan Sweet from Oxford Economics, Bessent has consistently supported moderate tariffs. If appointed as Treasury Secretary, Bessent could potentially reduce the market impact of Trump’s high tariffs.
Trump proposed imposing a 60% tariff on all Chinese goods during his campaign and a maximum 20% tariff on all other imported goods.
In an interview with Bloomberg in August, Bessent viewed tariffs as a “one-time price adjustment” that would not cause inflation, particularly targeting China during Trump’s second term.
Bessent’s column on Fox News this week highlighted tariffs as a useful tool to achieve the President’s foreign policy objectives, such as increasing allies’ defense spending, opening foreign markets to American goods, combating illegal immigration and fentanyl trafficking, and deterring military aggression.
As the Treasury Secretary, Bessent will essentially be the highest-ranking economic official in the U.S., responsible for overseeing the financial, economic, and fiscal affairs of the world’s largest economy, totaling $28.6 trillion in national debt, managing financial regulation, and handling and preventing market crises.
Bessent will face various challenges, including addressing the growing federal deficit due to Trump’s plans to extend or expand expiring tax policies next year. Without action, the federal deficit is expected to increase by $6 to $10 trillion over the next decade.
While Bessent believes that Trump’s agenda will result in stronger economic growth, increased revenue, and boosted market confidence, managing such a massive debt remains a challenge.
Bessent advocates for spending cuts and tax system reforms to counterbalance the costs of extending tax cuts.
He mentioned that negotiations with the Republican Congress would be necessary. Bessent stated in an interview with CNBC on November 6 that he had discussions with many incoming Republican committee chairs.
Bessent frequently emphasizes the importance of addressing national debt issues in media interviews.
He inherits Yellen’s role in leading the G7 group to provide economic support to Ukraine to resist Russia’s invasion and strengthen sanctions against Moscow. However, it remains unclear how Bessent will proceed given Trump’s desire to swiftly end the war and terminate U.S. financial support to Ukraine.
The Treasury Secretary serves as a key communicator between the federal government and the Federal Reserve (Fed). In the past, both Janet Yellen and Steven Mnuchin, Treasury Secretary during Trump’s first term, typically met weekly with the Fed Chair for breakfast or lunch.
(Information referenced from reports by Reuters and the Associated Press)