Bessent nomination will reassure Wall Street after a series of shock cabinet selections

Scott Bessent during an investment conference in Melbourne in 2018. Picture : David Geraghty.

Donald Trump has opted for a Treasury secretary in Scott Bessent who will keep Wall Street onside with the MAGA revolution rather than elevating a disrupter that could risk spooking the sharemarket.

One of the final Trump cabinet selections, it is also seen as one of the safest. Bessent’s nomination will reassure financial markets – buoyed by the election of Trump – that someone credible will be charged with running economic policy after a series of shock cabinet appointments rocked Washington.

After a drawn-out deliberation process, Trump opted for stability over the views of those in his inner circle who were pushing for more upheaval – including “first buddy” Elon Musk, who said Bessent would be a “business-as-usual choice”.

Trump has consistently seen the performance of the sharemarket as a gauge on his own leadership, so not scaring the horses was vital.

Bessent, 62, is a Wall Street veteran and a powerful financial backer of Trump, although he previously worked for Soros Fund Management, the firm founded by major Democratic Party donor George Soros.

The billionaire hedge fund manager has a deep understanding of markets and is a leading currency expert who champions tax cuts and deregulation as critical tools to revive the US growth engine.

If Trump follows through on his tax plans, Bessent could oversee a reduction in the US corporate tax rate for businesses that manufacture domestically to just 15 per cent – half the tax rate in Australia.

The Trumpian agenda has the potential to unleash the animal spirits driving the US economy, reinvigorate the private sector and drain capital from nations such as Australia that will face pressure to make their own corporate tax reductions.

Yet Bessent also advocates for a renewed effort to tackle US deficit reduction, and recently flagged cutting government spending by $US1 trillion over the next decade.

Trump said Bessent would “fortify our position as the world’s leading economy, centre of innovation and entrepreneurialism, destination for capital, while … maintaining the US dollar as the reserve currency of the world”.

A supporter of tariffs, Bessent has nonetheless sought to allay concerns about their impact. He has likened them to a de facto economic sanction to achieve foreign policy objectives, and told the Financial Times last month they were a negotiating instrument.

“My general view is that, at the end of the day, he (Trump) is a free trader,” Bessent said. “It’s escalate to de-escalate.”

Even after the election, Bessent told CNBC “I would recommend that tariffs be layered in gradually”.

The key question is how much influence Bessent will have over the direction of economic policy in a cabinet with a range of conflicting views.

If mass deportations and the swift imposition of across-the-board tariffs begin to provoke market turbulence, Bessent may find himself in a tough spot as Trump’s Wall Street whisperer.