(Bloomberg) — Scott Bessent wasn’t a familiar name in Republican political circles before Donald Trump nominated him to be Treasury secretary. “You know Scott Bessent?” Trump asked his guests from the stage of a reception this month at Mar-a-Lago. “Nobody heard of this guy.”
Yet the macro hedge fund executive beat out several rival contenders to get the nod for one of the most powerful jobs in global economics and finance after deftly pulling off a tricky political feat: He managed to convince both MAGA populists and Wall Street that he was on their side.
That tightrope act has delivered him to a Thursday confirmation hearing, after which he’s expected to receive easy approval from a Republican-controlled Senate. It also offers a preview of how Bessent will navigate his role at Treasury, where he’ll be a fulcrum of Trump’s “America First” agenda at a moment when investors are increasingly skittish about its potential impact.
US Treasury yields are testing 5% as traders see growing risks to what is often considered the world’s safest asset. Trump’s plans for an aggressive tariff regime — and the possibility that those levies stoke inflation — have alarm bells ringing across stock and currency markets, too.
Then there is Trump’s pledge to extend his tax cuts, which could add a whopping $4.6 trillion to the federal deficit — more than double the cost of his 2017 cuts, according to a report published in May. At the same time, the dollar’s reign as the world’s reserve asset is under threat, as more countries wonder if its centrality has left them beholden to the whims of American presidents at a volatile time in the nation’s politics.
Bessent’s “profile is admired, but his challenges run pretty deep,” said Gregory Faranello, head of US rates trading and strategy for AmeriVet Securities.
A former George Soros lieutenant, Bessent has said he plans to pursue policies that boost US economic output while slashing budget deficits. He has the backing of key figures in Trump World, many of whom he methodically cultivated as allies and have come to see him as a brainy avatar of their vision.
“He went Ivy League and has an elite Wall Street pedigree, but he’s a true populist — he’s MAGA to his core,” said Steve Bannon, Trump’s former chief strategist, who championed Bessent’s bid for Treasury.
But not everyone sees Bessent that way.
“Scott has very conservative views, but they are not necessarily orthodox or populist,” said billionaire investor Stanley Druckenmiller, who’s known Bessent for 30 years and was his boss at Soros Fund Management.
Bessent’s ability to enlist backers from across the full spectrum of Republican opinion — from scrappy populists to Wall Street eminences — helped him get the Treasury nod over Cantor Fitzgerald CEO Howard Lutnick, who was nominated for commerce secretary, and Marc Rowan, CEO of Apollo Global Management.
His performance at Treasury will test the strength of that support. Bessent, 62, will be at the center of a series of critical intraparty policy disputes over Trump’s economic agenda, all while managing relations with an often impulsive president and aiming to maintain calm in global markets.
Spokespeople for Bessent declined to comment.
Understanding Trumponomics
Bessent’s journey into politics was not something that many people who know him foresaw. But like others on Wall Street, he disapproved of President Joe Biden’s handling of the economy — a conviction that put him on a path to the Trump administration.
He did not donate to Trump’s 2016 presidential campaign or offer other public expressions of support, although he did give $1 million to Trump’s 2017 Inaugural Committee, FEC records show.
Behind the scenes, however, Bessent, who’d recently co-founded a hedge fund, was intent on learning about the insurgent president. Bannon says he first met Bessent shortly after leaving the Trump administration in 2017, at a Credit Lyonnais conference in Hong Kong, and recalls being struck by Bessent’s intense interest in Trump and what effects his agenda would have.
“Unlike most people, Scott wasn’t trying to get access,” said Bannon. “As an investor, he wanted to learn everything he could about Trump’s populist policies and how they would impact global capital markets.” The pair spoke for four hours the next day and have stayed in close touch ever since, Bannon says.
For a long time, Bessent maintained his low profile, sitting out the 2020 presidential race. But soon after Biden became president, Bannon says Bessent started soliciting his advice on how to position himself for Treasury secretary in a future administration. Bessent consulted others about whether the Federal Reserve, National Economic Council, Commerce Department, or ambassador to Japan would also be possibilities.
Bannon says Bessent adhered to his advice to master the economic issues Trump cares about most, particularly trade. He also forged relationships with trade and economic advisers to Trump, including Kevin Hassett, Peter Navarro, Art Laffer, Larry Kudlow and Stephen Moore. Perhaps most surprising for a hedge fund manager, Bessent took Bannon’s suggestion to engage with the pro-MAGA media universe, appearing on right-wing radio shows and podcasts, such as Bannon’s War Room and Breitbart News Saturday on Sirius XM radio to get his name out.
His campaign won him new allies on the populist right. “He understands the economics of Trumponomics,” says Matthew Boyle, Breitbart’s Washington bureau chief and the host of Breitbart News Saturday.
Bessent also developed a relationship with Trump, stepping forward as a major donor and Wall Street surrogate. He donated $1.5 million to back Trump’s third bid for the White House, split among his campaign, leadership political action committee, the Republican Party and a pair of allied super PACs. He became an outspoken public advocate, frequently adopting provocative Trump-like language as he slammed Democrats.
“Hearing the Biden administration say that the US needs to balance its budget is like Hannibal Lecter saying he’s going to go vegan,” he said during a visit to Bloomberg News in June.
‘Trump Rally’
In a January 2024 client note to investors in his hedge fund, Key Square Group, Bessent declared that the sharp rise in US equities didn’t owe to Biden’s policies, but was better understood as a “Trump Rally.”
Markets were booming largely because Trump held a “commanding lead” over Biden in early polling and investors were anticipating “the potential market friendly policies of a Trump victory,” he wrote.
A source close to Trump says the incoming president learned about the note and was pleased by it. By the last week of the campaign, Bessent was flying on Trump’s plane and accompanying him to rallies across the country, having also made allies of Donald Trump Jr. and JD Vance. A Trump transition spokeswoman did not reply to a request for comment.
All this maneuvering paid off when Bessent outlasted Lutnick and Rowan, and emerged as Trump’s Treasury choice after a contentious, weeks-long search marked by leaks and personal attacks.
Bessent’s selection was greeted with relief on Wall Street, where many took comfort in his résumé. Some market watchers said they looked forward to Bessent returning Treasury to a department grounded in market expertise. A common criticism of Janet Yellen’s Treasury Department — from both Republicans and Democrats — is that the former Federal Reserve chair stocked the building with PhD economists. That limited access for big business and created angst among traders about Treasury’s ability to navigate a potential problem in the plumbing of global markets.
“It’s a fair assessment,” said AmeriVet’s Faranello. “They didn’t get inflation right, and Yellen has owned up to that. But every few years we have a hiccup in markets, and someone with a market background brings the right mix of experience, and draws the market confidence, to address that.”
South Carolina Roots
Outwardly, Bessent comes off as the furthest thing from an unruly populist.
Born in Conway, South Carolina, to a prominent family that traces its Huguenot ancestry to the 17th century, he attended Yale University and went on to become chief investment officer at Soros’s hedge fund. He left in 2015 to start Key Square Group and returned to his home state. He and his husband, John Freeman, a former assistant district attorney in New York City, bought and restored a prominent Greek revival historical mansion on Charleston Harbor that is known locally as the “Pink Palace.” In November, as Bessent readied to relocate to Washington, the home was listed for $22.25 million. He reported assets worth at least $521 million in his personal financial disclosure.
Despite the wealth and privilege that come with his pedigree — he’s friendly with King Charles III, who has hosted him at Buckingham Palace — his upbringing was marked by periods of financial hardship, with his father twice declaring bankruptcy. By age nine, Bessent took his first job: setting up beach chairs and umbrellas.
Bessent, who owns more than 20,000 acres in North Dakota where soybeans and corn are grown, often refers to himself as one of the state’s largest farmers.
Mnuchin Comparison
As the Treasury secretary overseeing financial regulation, debt issuance, tax and currency policy, as well as sanctions, Bessent will inevitably be compared to Steven Mnuchin, who held that post in Trump’s first term. Mnuchin was able to last all four years under a volatile president, thanks to a combination of fealty, reliance on his personal relationship with Trump, selective silence in the face of media leaks about policy considerations and maintaining confidence in markets.
Bessent will have to figure out how to exert influence in a different economic and political world than Mnuchin did. Voters are weary after the shock of the pandemic and burst of inflation, and Trump is returning to the White House with more familiarity with the levers of power.
“My perception of the Treasury job has always been that it’s not to be a ‘yes man’ or a ‘yes woman,’ but to give your best advice and your best shot at persuading the president of what you think the right path should be,” said Druckenmiller. “But if he chooses another path, your job as Treasury secretary is to sell that path — whether you agree with it or not.”
–With assistance from Bill Allison.
(Updates with Bessent’s age, andadds detail about other potential government roles in the 18th paragraph. A previous version was corrected to remove reference to a location in the 31st paragraph.)
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