Donald Trump has chosen Scott Bessent, a longtime hedge-fund investor who taught at Yale University for several years, as his pick for treasury secretary, a statement from Trump confirmed on Friday. The job is one of the most powerful in Washington, with huge influence over America’s gigantic economy and financial markets.
The move to select Bessent is the latest as the president-elect starts to pull together the administration for his second term in the White House. The process so far has been marked largely by a focus more on personal and political loyalty to Trump than expertise and experience.
In economics, one of the main focuses and controversies of the treasury role will be to deal with Trump’s high-profile and oft-repeated promises to pursue a policy of aggressive new US tariffs in foreign trade – something that is widely feared by many other countries across the globe.
Wall Street had been closely watching who Trump would pick for the treasury role, especially given his plans to remake global trade through tariffs.
Bessent, 62, has advocated for tax reform and deregulation, particularly to spur more bank lending and energy production, as noted in a recent opinion piece he wrote for the Wall Street Journal.
The stock market surge after Trump’s election victory, he wrote, signaled investor “expectations of higher growth, lower volatility and inflation, and a revitalized economy for all Americans”.
Bessent follows other financial luminaries who have taken the job, including the former Goldman Sachs executives Robert Rubin, Hank Paulson and Steven Mnuchin, Trump’s first treasury chief. Janet Yellen, the current secretary and first woman in the job, previously chaired the Federal Reserve and White House council of economic advisers.
As the 79th treasury secretary, Bessent would essentially be the highest-ranking US economic official, responsible for maintaining the plumbing of the world’s largest economy, from collecting taxes and paying the nation’s bills to managing the $28.6tn treasury debt market and overseeing financial regulation, including handling and preventing market crises.
The treasury boss also runs US financial sanctions policy, oversees the US-led International Monetary Fund, the World Bank and other international financial institutions, and manages national security screenings of foreign investments in the US.
Bessent would face challenges, including safely managing federal deficits that are forecast to grow by nearly $8tn over a decade due to Trump’s plans to extend expiring tax cuts next year and add generous new breaks, including ending taxes on social security income.
Without offsetting revenues, this new debt would add to an unsustainable fiscal trajectory already forecast to balloon US debt by $22tn through 2033.
Managing debt increases this large without market indigestion will be a challenge, though Bessent has argued Trump’s agenda would unleash stronger economic growth that would grow revenue and shore up market confidence.
Bessent would also inherit the role carved out by Yellen to lead the G7 nations to provide tens of billions of dollars in economic support for Ukraine in its fight against Russia’s invasion and tighten sanctions on Moscow. But given Trump’s desire to end the war quickly and withdraw US financial support for Ukraine, it is unclear whether he would pursue this.
Another area where Bessent will likely differ from Yellen is her focus on climate change, from her mandate that development banks expand lending for clean energy to incorporating climate risks into financial regulations and managing hundreds of billions of dollars in clean energy tax credits.
Trump, a climate-change skeptic, has vowed to increase production of US fossil fuel energy and end the clean-energy subsidies in Joe Biden’s 2022 Inflation Reduction Act.
Reuters contributed to this report
