Trump picks Scott Bessent as Treasury Secretary

Scott Bessent, one of the finance world’s most vocal supporters of Donald Trump, will be elevated to a crucial position overseeing the incoming administration’s economic agenda.

Donald Trump has selected hedge-fund manager Scott Bessent to lead the Treasury Department. Picture: AFP

Donald Trump has selected hedge-fund manager Scott Bessent to lead the Treasury Department, according to people familiar with the matter, elevating one of the finance world’s most vocal supporters of the president-elect to a crucial position overseeing the incoming administration’s economic agenda.

Bessent in recent months has become a key economic adviser to Trump and his team. He has defended Trump’s economic proposals in the midst of opposition from some on Wall Street, who worry that the president-elect’s pledge to impose sweeping tariffs will trigger trade wars and ultimately lead to higher prices for American consumers.

If confirmed, Bessent would be tasked with turning Trump’s campaign-trail promises into policy, and he would help determine whether the president-elect follows through on some of his most eye-catching economic policy proposals -- from eliminating taxes on tips to slapping across-the-board tariffs on US imports.

A spokeswoman for Trump’s transition team did not immediately respond to a request for comment.

The Treasury Department is the premier economic policymaking agency in the federal government. It implements tax policy, manages the nation’s debt, leads financial regulators, controls sanctions and conducts economic diplomacy. While the U.S. trade representative takes the lead on tariffs, the Treasury secretary typically plays a central role on that issue as well.

Bessent, 62 years old, is the founder of investment firm Key Square Capital Management. He was the chief investment officer at George Soros’s Soros Fund Management from 2011 to 2015. He primarily lives in Charleston, S.C.

Bessent appeared alongside Trump on the campaign trail, and the president-elect has called him “one of the most brilliant men on Wall Street.” He impressed the president-elect, according to Trump’s aides, with his public predictions that the stock market would crash if Vice President Kamala Harris won the election.

The longtime investor’s allies executed a behind-the-scenes campaign to persuade Trump to choose him for the Treasury post. Among his supporters was Larry Kudlow, who led the National Economic Council during Trump’s first term. Bessent for his part wrote an opinion piece in The Wall Street Journal this month in which he rejected a group of Nobel laureates who warned that Trump’s economic agenda would harm the U.S. economy.

Recent days “prove markets’ unambiguous embrace of the Trump 2.0 economic vision,” Bessent wrote. “Markets are signalling expectations of higher growth, lower volatility and inflation, and a revitalised economy for all Americans.” Trump’s advisers said they took note of the opinion piece.

As Bessent’s stock rose among some of Trump’s advisers, some allies of the president-elect tried to undercut him. They took issue with his work for Soros and argued that he hadn’t done enough to defend Trump’s pledge to impose stiff tariffs. Bessent subsequently wrote a Fox News opinion piece in which he argued the economic case for tariffs, pushing back on assertions by economists that they would raise prices for consumers.

That wasn’t enough to sway everybody in Trump’s orbit. On Saturday, billionaire Elon Musk endorsed Bessent’s leading opponent for the job, Howard Lutnick, the chief executive of financial-services firm Cantor Fitzgerald. Lutnick, Musk wrote on his social-media platform, X, would “enact change.” Bessent, he argued, is a “business-as-usual choice.” Musk has been by Trump’s side at Mar-a-Lago since the election, advising him on personnel, including whom he should pick as Treasury secretary.

Bessent has advised Trump to pursue a “3-3-3” policy: cutting the budget deficit to 3% of gross domestic product by 2028, spurring GDP growth of 3% through deregulation, and producing an additional 3 million barrels of oil or its equivalent a day.

He has suggested that Trump’s tariff threats are a negotiating strategy aimed at extracting concessions from other countries. “My general view is that at the end of the day, he’s a free trader,” Bessent told the Financial Times last month. “It’s escalate to de-escalate.” Last month, Bessent suggested that Trump should announce whom he plans to select as Fed Chair Jerome Powell’s successor so that this “shadow” chair could try to undercut Powell, making him a lame duck. Bessent recently told the Journal that based on recent criticism of the idea, he no longer thought it was worth pursuing.

While Bessent is known in New York financial circles, he doesn’t have the fame of the biggest Wall Street players. Having spent little time in Washington, he will have to build relationships on Capitol Hill, which will be crucial as Republican politicians embark on a bid to extend trillions of dollars in expiring tax cuts.

Bessent will have to navigate competing influences in Trump’s orbit. While Bessent in the Journal opinion piece extolled the prospect of stronger growth driving up the U.S. dollar, other Trump advisers including former U.S. trade representative Robert Lighthizer have touted prospects for boosting exports with a weaker dollar. Trump and Bessent inherit a tricky fiscal backdrop, with the Treasury set to roll over trillions of dollars in debt in coming years that it borrowed at much lower interest rates.

Bessent in a speech earlier this year was sharply critical of President Biden and his advisers’ use of a narrow margin of victory in 2020 to push through transformative policy changes in the midst of an unfolding economic upswing. Bessent observed how voters grew unhappy with Biden for misreading the electoral outcome of 2020 with that approach.

It will now fall to Bessent to shape the agenda of Trump -- who likewise was elected earlier this month in the midst of an economy that has enjoyed solid economic growth in recent quarters -- while avoiding Biden’s pitfalls.

— Nick Timiraos contributed to this article.

The Wall Street Journal