Elon Musk wants Trump to upset Wall Street with Treasury picks

CNN
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As Donald Trump privately considers his team to lead America’s economy in his tenure, Elon Musk has put his thumb on the scale and urged followers on X to help make a public push for a candidate who won’t be “business as usual” on Wall Street.

Musk, a Trump ally who has gained significant influence in shaping Trump’s incoming administration, wrote X on Saturday that he wants Howard Lutnick, a staunch Trump supporter who runs the investment bank Cantor Fitzgerald, to serve as the next finance minister.

Scott Bessent, the founder of asset management firm Key Square, has been considered the front-runner for the job.

“My view is that Bessent is a business-as-usual choice, on the contrary @howardlutnick will actually effect change,” Musk submitted Saturday. “Business-as-usual is bankrupting America, so we have to change one way or another.”

Musk urged his followers to “weigh into this too @realDonaldTrump to consider feedback.”

Both Bessent and Lutnick are respected on Wall Street and have publicly supported Trump and his economic policies — including massive and unprecedented tariffs that remain largely unpopular among mainstream economists. Both have also embraced cryptocurrencies, which Trump has backed in recent months despite initial skepticism.

But Lutnick, a leader of Trump’s transition team, demonstrates a personality somewhat more forceful and flamboyant than Bessent, whose demeanor is perhaps more typical of a Treasury secretary — a position that often plays a calming role for Wall Street in times of economic or market turmoil.

For example, Bessent wrote an op-ed on Fox News on Friday in support of Trump’s policies, saying, “Tariffs are a means to finally stand up for Americans.” Lutnick, by contrast, spoke at Trump’s controversial rally in Madison Square Garden before the election, exclaiming, “When was America great? … 125 years ago. We had no income tax and all we had were tariffs.”

That’s why some Wall Street titans are trying to push for Bessent. Kyle Bass, a billionaire hedge fund investor at Hayman Capital Management, said Lutnick does not have the makeup to lead the Treasury Department.

“Scott Bessent is eminently more qualified than Howard Lutnick to lead the US Treasury,” Bass posted X Wednesday. “Scott understands markets, economics, people and geopolitics better than anyone I’ve ever interacted with. The markets have already predicted a Bessent election. Lutnick is not Trump’s answer.”

Agree with Bass, Third Point’s Dan Loeb submitted: “Right now, the only thing that matters is the president’s choice for this important position,” noting that the Treasury secretary will help determine how much America’s economy grows by giving investors confidence in inflation and markets.

But style aside, market analysts say Trump has made it clear he intends to impose widespread tariffs, and whoever fills the Treasury secretary’s office is unlikely to make much of a difference other than, perhaps, the speed at which they is adopted.

“The fact is, if Trump wants tariffs, he’s going to get tariffs, regardless of who’s in charge at the Treasury or the USTR or elsewhere,” said Scott Lincicome, vice president for general economics and trade at the libertarian-leaning Cato Institute. “There’s a lot of leverage he can use and I wouldn’t really expect a big difference there.”

If Trump’s plans to impose tariffs across the board, deport millions of undocumented workers and potentially sway the Federal Reserve go ahead, the next Treasury secretary may have to contend with another inflationary crisis. These policies would weaken growth, increase inflation and lower employment, according to a latest working paper published by the Peterson Institute for International Economics. Inflation will rise to at least 6% in 2026, and by 2028 consumer prices will be 20% higher, the researchers found.

Both Lutnick and Bessent have been skeptical of mainstream economists’ predictions that Trump’s policies would be inflationary.

The finance minister’s candidates have spent the last week maneuvering behind the scenes to secure the financial role.

By the end of last week, Trump had reached a near-final decision to hand the role to Bessent, a relatively recent MAGA convert, a decision that some officials involved in the transition began messaging to outside allies. At the time, Lutnick waged an aggressive, eleventh-hour campaign to position himself for the job. Four people familiar with the dynamic tell CNN that Lutnick tried to convince Trump that only he would be in full support of the steep tariffs Trump had promised — and which Lutnick had promoted in cable TV appearances.

As the contest intensified — with Bessent described as taking a more backseat approach to Lutnick’s semi-public campaign — frustration became palpable among Trump and his team.

“He follows the Cheney model,” one person said of Lutnick — not positively — referring to Dick Cheney’s job as head of George W. Bush’s vice presidential selection committee before he got the job himself.

Trump even thought he should rule them both out and pick a neutral party: Tennessee Sen. Bill Hagerty had interviewed the previous weekend for a series of administration jobs, and Larry Kudlow, a Trump loyalist, would be seen as a market- and tax-friendly choice.

But Kudlow, 77, informed the Trump team that he will not return to government, in part to preserve his health, according to sources familiar with the conversations. In June 2018, while serving as Trump’s director of the National Economic Council, Kudlow suffered a mild heart attack and was hospitalized. In addition to a leadership role at the America First Policy Institute, an outside group that has helped develop Trump’s agenda, he currently hosts a show on Fox Business where members of Trump’s inner circle often appear to promote it.

A full week after appearing to decide to nominate Bessent, Trump interviewed him again at Mar-a-Lago.

Regardless of party affiliation, the Secretary of the Treasury has historically advocated policies that strengthen the U.S. dollar, promote economic growth, signal stability to the stock and bond markets, and seek to maintain the stability of the tax base from which revenues flow into Treasury coffers to fund the operations of the federal government.

A key cabinet player, the Treasury Secretary advises the President on economic and fiscal matters, including spending and taxes.

The role will be particularly important in the incoming Trump administration, given the president-elect’s campaign promises to impose a blanket tariff of either 10% or 20% on every import coming into the US, as well as a tariff upwards of about 60% on all Chinese imports.

The incoming secretary will also have to move quickly to ensure that the nation does not default on its obligations once the debt ceiling returns in early January, unless Congress acts on the ceiling before then. Additionally, the secretary will work with Trump and congressional Republicans to extend the more than $4 trillion in tax cuts and jobs provisions that expire at the end of 2025.

And all that is besides permanent tasks of the secretary overseeing the Treasury Department, which pays trillions of dollars in bills, collects taxes, sells U.S. debt securities to investors, and acts as a regulator of the banking and finance industry. The secretary also serves as the country’s finance minister on the global stage.

During his first term, Trump picked Steven Mnuchin, a financier and Hollywood producer who stayed in the administration all four years. Mnuchin, who had no government experience before taking over as Treasury secretary, had also served as finance chairman for Trump’s 2016 presidential campaign. He worked on and helped implement the 2017 tax relief law and some of the key pandemic emergency measures, including stimulus checks, that was distributed to millions of Americans, among other initiatives.