What does Trump's Treasury secretary pick mean for the economy?

Donald Trump had two seemingly contradictory goals when picking a Treasury Secretary. He wanted somebody who would keep Wall Street happy. He also wanted a right-hand man to help him execute his vision for higher tariffs on international trade, a shift that makes CEOs nervous. Scott Bessent was the pick. Bessent, a hedge fund executive, is seen by business leaders as a "safe choice" for the job, said CNN. "Bessent is reasonable and pragmatic," said Jeffrey Sonnenfeld, the founder and president of the Yale Chief Executive Institute. There's hope among corporate types that Bessent will "moderate some of Trump's more aggressive campaign promises" to upend the economy, said CNN. In practice, that means they hope the new secretary will rein in the president-elect on mass deportations and high tariffs. Bessent "understands Smoot-Hawley tariffs exacerbated the Great Depression," said Sonnefeld. Bessent may not be a status quo pick, said The Wall Street Journal. "We are going to have to have some kind of a grand global economic reordering," Bessent said in June. He has recently argued for "increasing tariffs on national-security grounds" and to promote American interests abroad. But he also believes "time is running out" for the United States to pull back from "excessive budget deficits and indebtedness," said the Journal. That means getting "government spending under control."

The '3-3-3' plan

Bessent was once a major donor "to top Democrats including Hillary Clinton, John Kerry and Barack Obama," said The New York Times. In the 1990s he was a partner at Soros Fund Management and earned the firm $1 billion. Eventually he turned to backing GOP candidates and was early to sign on to Trump's campaign for a second term while many business leaders hesitated. Trump is a ""stock that goes up on bad news," he told one interviewer. In recent months he has pitched a "3-3-3" plan to guide fiscal policy under Trump: Aim for 3% economic growth, reduce the deficit to 3% of the gross domestic product and increase oil production to 3 million barrels per day. The Treasury pick is expected to implement "policies more favorable to the crypto industry," Dan Runkevicius said at Forbes. The details are unclear, but industry figures expect Bessent to create a "clear regulatory framework for digital assets" that balances the tension between "fostering innovation and enforcing regulation." Crypto leaders are enthusiastic. Ripple CEO Brad Garlinghouse said Bessent is "the most pro-innovation, pro-crypto Treasury Secretary we've ever seen."

Preventing 'another round of sticker shock'

"Whatever happens Bessent will be in the thick of it," John Cassidy said at The New Yorker. Trump is "famously obsessed" with how the stock market responds to his policies and actions. But Trump's promises of deportations and tariffs "could well lead to another round of sticker shock for American consumers" already angry about inflation under President Joe Biden. Bessent's job will be to assure investors around the world of the stability of the American system while being "a voice of reason internally," said Cassidy. "He will have his work cut out for him."