Scott Bessent: CEOs relieved by Trump’s pick to lead Treasury

new York
CNN
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Business leaders say they are relieved that President-elect Donald Trump has made a safe decision to lead the Treasury Department after more unconventional selections for other Cabinet positions.

Hedge fund manager Scott Bessent survived an internal dispute over the role of Treasury secretary, a key position that will face deadlines and pressure almost immediately.

Bessent’s background as a global investor who has worked with legendary money managers and his longstanding support from both Republicans and Democrats have eased the concerns of business leaders – and financial markets.

The Dow hit a new record high of 44,737 on Monday and ended the day up 440 points, or nearly 1%. The S&P 500 rose 0.3% and the Nasdaq Composite rose 0.27%. Treasury yields fell and the dollar fell.

“The relief is huge,” said Jeffrey Sonnenfeld, founder and president of the Yale Chief Executive Institute. “Bessent is sensible and pragmatic.”

JPMorgan Chase CEO Jamie Dimon, one of the most powerful executives on Wall Street, is also a fan. Dimon thinks highly of Bessent and believes he is an excellent choice, a source close to Dimon told CNN on Sunday.

Bessent, 62, has worked with some of the world’s most renowned investors, including Jim Rogers, Jim Chanos, Stanley Druckenmiller and George Soros.

The treasury secretary position is one of the most important appointments in any administration, but especially so given Trump’s focus on the economy and voters deeply frustrated with the cost of living.

Bessent will serve as Trump’s quarterback and implement his economic agenda. And for this key position, Trump has chosen a choice that is not expected to result in a contentious confirmation fight.

Sonnenfeld, known as “the CEO whisperer” for his Rolodex of business contacts, said Corporate America’s hope is that Bessent can temper some of Trump’s more aggressive campaign promises, which mainstream economists fear could re-ignite inflation .

These include mass deportations that threaten to starve workers in key industries, potentially influencing Federal Reserve policy, and blanket tariffs on all $3 trillion in U.S. exports.

“Bessent supports the use of tariffs as a cudgel. He supports selective tariffs. But he understands that the Smoot-Hawley tariffs exacerbated the Great Depression,” Sonnenfeld said, referring to Congress’s infamous 1930 tariffs. “He doesn’t want another Smoot-Hawley.”

Of course, even if Bessent is a voice for moderation in the Trump debates over tariffs and deportations, that doesn’t mean he will necessarily win those arguments, which will ultimately be decided by Trump himself.

And while investors are cheering Bessent’s pick, it’s far too early to tell whether he will also be an asset to Main Street.

“Wall Street may be breathing a sigh of relief over the nomination of Scott Bessent, but working people are not seeing any help,” Senator Elizabeth Warren, who is expected to be the top Democrat on the Senate Banking Committee, said in a statement on Monday. “Mr. Bessent’s expertise helps wealthy investors make more money, not reduce costs for families squeezed by corporate profiteering.”

During a radio interview with Larry Kudlow on Saturday, Bessent said: “Tariffs can’t be inflationary because when the price of one thing goes up, people have less money to spend on the other thing unless you give them more money.” . “no inflation.”

“Inflation comes from either an increase in the money supply or an increase in government spending, and that’s exactly what happened under Biden,” he added.

Still, many economists continue to warn that tariffs — particularly the blanket tariffs promised by Trump — will drive up prices.

Goldman Sachs told clients in a note on Sunday evening that the biggest risks to inflation are tied to politics – particularly tariffs. The bank warned that a flat 10% tariff would push core prices up by about 1% and delay the return to the Federal Reserve’s 2% inflation target.

Bessent defeated Howard Lutnick, CEO of Cantor Fitzgerald, who was also in the running for Treasury Secretary and was supported by Elon Musk. Trump instead chose Lutnick as commerce secretary, another key role although not as prominent as that of the Treasury Department.

“Lutnick is a bull in the China shop. CEOs across the industry were concerned about Lutnick’s personality,” Sonnenfeld said.

Anthony Scaramucci, the financial executive and former Trump adviser who has since become a fierce Trump critic, praised Bessent on

An “outstanding” choice

Jay Timmons, the manufacturing trading group’s CEO who in January 2021 called on Vice President Mike Pence to invoke the 25th Amendment to remove Trump from power, praised Trump’s decision to hire Bessent.

“Scott’s extensive expertise in financial markets and his commitment to promoting economic growth make him an excellent choice to lead the Treasury Department,” Timmons, the CEO of the National Association of Manufacturers, said in a statement minutes after Trump announced the selection had.

Timmons expressed hope that Bessent, who said the Biden administration has “out-of-control government spending,” will help make Trump’s promise to extend the 2017 tax law a reality.

Left-of-center economists and progressives have concerns about this very outcome.

Larry Summers, who served as Treasury secretary during the Clinton administration, warned of a supply shock under Trump’s economic plan in an interview with CNN’s Fareed Zakaria that aired Sunday. He argued that higher prices were caused by even larger tariff increases than Trump imposed in his first term, as well as a labor shortage that was hurting farmers and housing.

Summers said he has “little doubt that the Trump program represents a far greater stimulus to inflation than anything President Biden has decided.”

“For all his talk of taking care of working-class Americans, President-elect Trump’s choice of a billionaire hedge fund manager to run the Treasury Department shows that he only wants to maintain a rigged system that only works for big corporations and “The very rich work.” Tony Carrk, executive director of the progressive group Accountable.US, said in a statement on Friday. “Scott Bessent’s first order of business will be to give away trillions of dollars in additional tax giveaways to the very wealthy.”