President-elect Donald Trump has chosen prominent investor Scott Bessent to take on the role of US treasury secretary, putting him at the helm of a cabinet position with vast influence over economic, regulatory and international affairs.
Bessent primarily lives in Charleston, South Carolina, with his husband John Freeman and if confirmed, would be the first openly gay treasury secretary.
Bessent worked for noted short seller Jim Chanos in the late 1980s and then joined Soros Fund Management, the famed macroeconomic investment firm of billionaire George Soros.
There Bessent helped Soros and top deputy Stanley Druckenmiller on their most famous trade – shorting the pound.
Soros Fund Management made £1bn in just a single month by betting the pound and several other European currencies were priced too richly against the German Deutschemark.
On 16 September 1992, a day later known as Black Wednesday, Soros led a field of speculators who borrowed UK gilts only to sell them and buy them back later at cheaper prices.
They repeated the trick every few minutes, making a profit each time.
The devaluation of the pound that followed devastated the British economy and also the perception that those in John Major’s government were competent financial managers.
The 1992 shorting of the pound is now a famous trade understood to be equal parts brilliant and ruthless.
Wall Street has been closely watching who Trump will pick for treasury secretary, especially given his plans to remake global trade through tariffs.
Bessent 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 market’s surge after Trump’s election victory, he wrote, signalled investor “expectations of higher growth, lower volatility and inflation, and a revitalised economy for all Americans”.
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 $28.6trn 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, 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 $8trn 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 $22trn 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 Janet Yellen to lead the Group of Seven wealthy democracies 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 sceptic, has vowed to increase production of .S fossil fuel energy and end the clean-energy subsidies in President Joe Biden’s 2022 Inflation Reduction Act.
The announcement of Bessent as the president-elect’s US treasury secretary pick was one of a raft of nominations made by Trump on Friday.
Lori Chavez-DeRemer, a congresswoman who has billed herself as a bipartisan pragmatist, was tapped to be labour secretary.
Russ Vought, a key architect of “Project 2025”, the controversial conservative plan to overhaul the government, was announced as incoming director of the US Office of Management and Budget, a powerful agency that helps decide the president’s policy priorities and how to pay for them.
Surgeon and writer Martin Makary, who opposed Covid-19 vaccine mandates for the general public, will lead the US Food and Drug Administration.
London-born Sebastian Gorka, who once served as an advisor of Hungarian Prime Minister Viktor Orbán, will serve as deputy assistant to the President and as senior director for counterterrorism.
Former NFL player Scott Turner will serve as housing and urban development secretary.
Fox News contributor Dr. Janette Nesheiwat was chosen to be the surgeon general and State Department official Alex Wong, who served as deputy special representative for North Korea during the first Trump administration, was announced as deputy national security adviser.
With Reuters
