President-elect Donald Trump announced on Friday that billionaire Scott Bessent is his choice for the next Treasury Secretary.
“Scott has long been a strong advocate of the
America First Agenda…he will help me usher in a new Golden Age for the United States, as we fortify our position as the World’s leading Economy, Center of Innovation and Entrepreneurialism, Destination for Capital,” Trump said in a statement, introducing Bessent as his pick for the top financial position.
If the Senate confirms his appointment, Bessent—despite having no government experience—will be central to implementing Trump’s economic vision. This includes navigating through major tax cuts, advocating for protective tariffs, and confronting the world’s biggest economy’s ballooning debt.
So, who is Scott Bessent? What are the obstacles he will encounter in this role? Here’s a closer look.
5 Things to know about Scott Bessent
1. He is a hedge fund veteran: Former Chief Investment Officer at Soros Fund Management, Bessent had an influential role in Soros’ London investment operations.
He played a key role in the famous 1992 bet against the pound, which yielded massive profits on “Black Wednesday,” when the pound was de-linked from European currencies.
Currently, he is the CEO and Chief Investment Officer of New York-based hedge fund Key Square Capital Management, according to S&P Capital IQ. The 62-year-old has also lectured at Yale University on economic booms and busts in the 20th century and the history of hedge funds.
2. He was a Democrat donor: Before becoming a Trump donor and adviser, Bessent had donated to various Democratic causes.
In the early 2000s, he hosted a fundraiser for the Democratic National Committee supporting Democrat Vice President Al Gore’s presidential nomination. He has also supported popular Democrat leaders, including Hillary Clinton and Barack Obama.
3. A vocal Cryptocurrency advocate: Bessent has openly supported Trump’s stance on the crypto industry
“Crypto is about freedom and the crypto economy is here to stay,” Bessent said in an interview with Fox Business in July.
A more friendly stance by the Wall Street financier can aid cryptocurrencies like Bitcoin to continue their upward momentum.
4. He would be the first openly gay treasury secretary: If confirmed by the Senate, Bessent would be the first openly gay Treasury Secretary and the first Senate-confirmed LGTBQ Cabinet member in a Republican administration, according to AP.
Bessent lives with his husband John Freeman, a former New York City prosecutor, in South Carolina and has two children.
5. He rejected Nobel prize economists’ views: Bessent first made waves when he dismissed the views of 16 Nobel Prize-winning economists that Trump’s plans to impose broad tariffs would lead to price hikes and inflation.
“Critics of tariffs argue that they will increase the prices Americans pay for imported goods,” he wrote for Fox News. “But the facts argue against this. President Trump’s first-term tariffs did not raise the prices of the affected goods, despite predictions back then that the tariffs would prove inflationary.”
Challenges for Bessent
Here are some challenges that Bessent will face if he assumes the role.
Balancing trade and tariffs
According to EY chief economist Gregory Daco, one major challenge for Bessent will be “how to navigate a desire for more protectionism while avoiding a global trade war.
Trump has vowed across-the-board tariffs of at least 10 per cent on all imports and steeper levies on China, although it remains to be seen how he will do so.
His Treasury secretary would likely have to ensure that trade policies “allow for a negotiation between trading partners without doing excessive damage to the economy, sparking inflationary pressures,” Daco told AFP.
A key question is whether the candidate proves to be a “cheerleader and defender” of Trump’s tariffs or a “moderating force” compared to more aggressive proponents, said David Wessel, a senior fellow in economic studies at Brookings.
Managing debt ceiling drama
The US Treasury faces the challenge of ensuring the country continues paying its bills while navigating talks to raise the debt ceiling.
The debt ceiling, a cap on government borrowing to cover already incurred expenses, has become a highly contentious issue in recent years, often driven by partisan divides.
The limit suspension technically expires in January and outgoing Treasury Secretary Janet Yellen will likely make initial moves to avoid defaulting on the country’s obligations.
The new administration will have to continue such measures.
With Republicans having control in the White House and Congress, analysts expect the debt ceiling will be raised.
But some lawmakers may want concessions for doing so, and the Treasury chief will be important in negotiating the tradeoffs, Wessel said.
“This will be the first time in the modern history of the debt limit that there will be a change in administration during a debt limit episode,” said Shai Akabas, executive director at the Bipartisan Policy Center’s economic policy program.
Tax cuts
Trump’s budget, to be presented in early 2025, will likely be his government’s starting point when it comes to tax relief and spending cuts, Wessel noted.
With economic dissatisfaction being a key factor in the election outcome, tax cut extensions are set to be high among the Treasury secretary’s priorities.
But the challenge is rolling out policies while maintaining the US economy on a sustainable debt trajectory.
“It’s going to be a very delicate job,” said Daco. “Everything and anything on the menu has been ordered during the campaign.”
These include tax cuts for households and businesses, alongside a reduction in taxes on tips, or potentially greater spending on energy.
Also read:
Tariffs, tax cuts and deportations: What Trump’s policies could mean for America’s economy
Debt management
According to estimates by the Committee for a Responsible Federal Budget, Trump’s agenda could add approximately $8 trillion to the national debt.
“Debt held by the public now stands at $28.6 trillion, or nearly 100 per cent of gross domestic product (GDP), and it is growing at an unsustainable rate,” said Akabas.
“If we don’t find a way to stop digging, the Treasury secretary may have to confront the debt burden’s pernicious consequences,” he added.
These consequences could include higher interest rates on US debt or increased rates for consumer debt.
The country could also face downgrades from credit rating agencies or negative reactions in financial markets, he warned.
“This could erode global faith in the US as an economic leader and adversely affect our future growth,” he added.
With input from agencies