Trump’s safe Treasury pick suggests he doesn’t want to rock the boat on Wall Street

CNN
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President-elect Donald Trump’s choice for Treasury Secretary stands in stark contrast to some of the more controversial and questionable cabinet picks he has announced so far. Scott Bessent doesn’t want to scare Wall Street, the industry he’s supposed to oversee.

Finance Minister is a serious job for a serious person who can meet immediate deadlines and pressures weighing on financial markets from around the globe. In many respects, the Chancellor of the Exchequer is the quarterback of the economy.

A radical pick could have rattled investors and added risk to Trump’s already complex economic agenda.

Wall Street was unmoved by the committee. Some welcomed it.

“Scott Bessent has been regarded by many observers as one of the most respected and competent candidates,” said Judge Glock, a senior fellow at the Manhattan Institute. “He has maintained his ties to traditional business and financial groups as well as to Trump loyalists.”

In other words, Trump didn’t pick Wall Street’s Matt Gaetz or Robert F. Kennedy, Jr. to run the Treasury Department.

That doesn’t mean Bessent will push back on Trump’s policies, including higher and cross-cutting tariffs, big tax cuts or mass deportations of undocumented immigrants. Bessent is a relatively new MAGA convert who founded the hedge fund Key Square and previously worked as an investment director for Soros Fund Management. Last week, he wrote an op-ed on Fox News last week in support of Trump’s policies.

But Glock said Bessent would serve as a steady hand guiding the economy.

“On the issue that most sharply divides Trump and traditional business leaders — tariffs — Bessent has focused on the value of tariffs as a tool to encourage better deals with trading partners, which have a long and bipartisan history,” Glock noted.

One of the Treasury Secretary’s jobs is to help keep Wall Street calm and confident in times of economic or market turmoil. In other words: Avoid a blip turning into panic. That’s why Bessent had been considered a front-runner for the job before he ultimately claimed it.

Some parts of Trump’s circle, including Elon Musk, publicly advocated for a disruptor in the role — namely Cantor Fitzgerald CEO Howard Lutnick, who Musk said “will actually implement change,” as opposed to Bessent, who would be “business as usual.” Lutnick was ultimately elected Secretary of Commerce—an important but ultimately less critical role for market decision-making.

A steady demeanor, a key trait of a successful Treasury secretary, likely served as a factor in Trump’s ultimate choice to go with Bessent.

“I don’t think there is a meaningful difference in customs policy outcomes between Bessent or Lutnick,” said Isaac Boltansky, BTIG director of policy research. “But there are differences in temperament and experience that will matter when the next Treasury Secretary communicates with the public, lawmakers, and foreign officials.”

Electing Bessent proves that some protections for Trump still exist — especially when it comes to Wall Street and managing the nation’s money.

“Scott understands markets, economics, people and geopolitics better than anyone I’ve ever interacted with,” Kyle Bass, a billionaire hedge fund investor at Hayman Capital Management, said in a X posts last week.

During his first term, Trump was obsessed with market movementswho sees the Dow Jones Industrial Average as a real-time barometer of his success. Trump regularly tweeted out even the most mundane market milestones, sharply distancing himself from the hands-off approach his predecessors took with the market.

So Bessent will be charged with trying to enact policies that serve the president-elect’s agenda while keeping the market boom going.

It might not be easy: During Trump’s first trade war with China, markets tumbled several times, at least in part because of fears about Trump’s trade policies.

For example, in December 2018, markets were in turmoil due to fears of the US-China trade war. That market turbulence left Trump hungry to strike a deal with Chinese President Xi Jinping during a high-stakes meeting in Argentina, sources told CNN at the time. As markets failed to bounce back, Trump expressed anxiety about falling stocks and even worried that the losses could hurt him politically.

It’s easy to see how a similar story could play out in 2025, as Trump has promised to impose 60% tariffs on China, a leading US trading partner and source of supplies and parts for US companies.

Economists have warned that Trump’s China tariffs and proposed 10% to 20% blanket tariffs on all US imports will be inflationary.

A similar story could unfold if investors and CEOs begin balking at Trump’s plans to deport millions of undocumented workers — a move that could also lift inflation.

Investors could also react very negatively if Trump made a move to oust Federal Reserve Chairman Jerome Powell, with whom Trump has had a complicated and sometimes contentious relationship. The Minister of Finance works closely with both the central bank and the White House.