His selection came after the competition for the top economic job appeared wide open last weekend, with the world’s richest man, Elon Musk, instead throwing his support behind the team’s co-chair. Trump transition, Howard Lutnick.

Lutnick has since been appointed Commerce Secretary to lead Trump’s tariff and trade agenda, and Bessent’s nomination days later does not appear controversial at this time.

“Scott Bessent is a credible and traditional choice for Treasury secretary,” said Jason Furman, a Harvard University professor and former White House economic adviser.

“I thought previous administrations had chosen it,” Furman, former chairman of the Council of Economic Advisers, told AFP.

But a key difference is that Bessent, 62, has had to adopt and defend views on topics such as tariffs, in a way “he never would have done to hold the position of a previous Republican administration.

Tariffs are a key part of Trump’s economic agenda, with the Republican president-elect pledging to impose sweeping obligations on allies and adversaries alike.

In an opinion piece published earlier this month on Fox News, Bessent defended the potential use of tariffs as a way to raise government revenue, protect U.S. strategic industries and negotiate with partners commercial.

He would be one of the first openly gay Cabinet officials if confirmed by the Senate, and the first to head the Treasury Department.

“Adult in the room”

Jens Nordvig, chief executive of data and analytics firm Exante Data who worked with Bessent, drew a contrast between his behavior and that of other Trump supporters.

While some Trump allies tend to make “blanket, sweeping statements,” Bessent is an “analytical thinker, and he communicates accordingly,” Nordvig told AFP.

He counts Bessent among his first clients.

“I would expect his message to be very focused, to get his key points across, without any flamboyance or unnecessary enthusiasm,” Nordvig added of the Wall Street veteran.

Calling Bessent a “safe choice,” David Wessel, a senior fellow in economic studies at Brookings, told AFP: “He will be an adult in the room for the Trump administration.”

Besides Bessent, leading contenders for Treasury chief in recent days include former Federal Reserve Governor Kevin Warsh, Apollo Global Management Managing Director Marc Rowan and Tennessee Senator Bill Hagerty.

A relief from the market?

It remains to be seen whether Bessent will have much influence “in moderating some of the administration’s most aggressive trade policies” or whether he will simply be a spokesperson, Wessel said.

He also doesn’t have much experience dealing with Congress, and that would be important next year as the Trump administration works to raise the debt ceiling and propose a bill tax to keep its economic promises.

Bessent is also expected to deal with the country’s debt burden, with debt borrowed at much lower interest rates previously and Trump’s plans estimated to add trillions over time.

In an open letter published on Saturday, Nordvig called for “thoughtful leadership” within the Treasury, saying a realistic approach to tax cuts and bond issuance was needed.

He also sounded a hopeful note, saying Bessent would work to reduce tail risks for markets.

Krishna Guha, vice president of Evercore ISI, believes that Bessent’s appointment “will be welcomed by the financial markets”, given his deep understanding of markets and macroeconomic conditions.

Guha also warned of the risk of rising bond yields and “a rise in mortgage rates and a fall in the housing market, while causing a sell-off in stocks.”

In his previous administration, Trump viewed the stock market as a gauge of his success.

© 2024 AFP