Scott Bessent: CEOs are relieved about Trump’s pick to lead the Treasury Department

New York
CNN
—

Business leaders say they are relieved President-elect Donald Trump made a safe choice to lead the Treasury Department after more unconventional picks for other Cabinet posts.

Hedge fund executive Scott Bessent survived an internal wrangle over the role of finance minister, a key position that will face near-immediate deadlines and pressure.

Bessent’s pedigree as a global investor who has worked with legendary money managers, and his history of supporting both Republicans and Democrats, have eased concerns for business leaders — and financial markets.

The Dow hit a new record high of 44,737 on Monday and ended the day up 440 points, or just under 1%. The S&P 500 rose 0.3% and the Nasdaq Composite rose 0.27%. Government interest rates ticked down and the dollar fell.

“There’s a huge sense of relief,” said Jeffrey Sonnenfeld, founder and president of the Yale Chief Executive Institute. “Bessent is reasonable and pragmatic.”

JPMorgan Chase CEO Jamie Dimon, one of the most powerful executives on Wall Street, is also a fan. Dimon thinks highly of Bessent and believes he is an excellent choice, a source close to Dimon told CNN on Sunday.

Bessent, 62, has worked with some of the most renowned investors in the world, including Jim Rogers, Jim Chanos, Stanley Druckenmiller and George Soros.

The Treasury secretary role is one of the most crucial appointments of any administration, but especially this one given Trump’s focus on the economy and voters’ deep frustration with the cost of living.

Bessent will serve as Trump’s quarterback and carry out his economic agenda. And for this key position, Trump chose to go with a choice that is not expected to draw a contentious confirmation battle.

Sonnenfeld, known as “the CEO Whisperer” to his vast array of business connections, said Corporate America’s hope is that Bessent can moderate some of Trump’s more aggressive campaign promises that mainstream economists fear will fuel inflation.

That includes mass deportations that threaten to starve key industries of workers, potentially affecting Federal Reserve policy and tariffs across the board on all $3 trillion of U.S. exports.

“Bessent supports using tariffs as a cudgel. He supports selective tariffs. But he understands that Smoot-Hawley tariffs worsened the Great Depression,” Sonnenfeld said, referring to infamous 1930 rates mandated by Congress. “He doesn’t want another Smoot-Hawley.”

Of course, even if Bessent is a voice for moderation in the Trump debates on tariffs and deportations, that doesn’t mean he will necessarily win those arguments, which will ultimately be decided by Trump himself.

And while investors are cheering the election of Bessent, it’s far too early to tell if he’ll also win for Main Street.

“Wall Street may be breathing a sigh of relief over Scott Bessent’s nomination, but working people don’t see any help coming their way,” Sen. Elizabeth Warren, who will be the top Democrat on the Senate Banking Committee, said in a statement Monday. . “Mr. Bessent’s expertise helps wealthy investors make more money, not cut costs for families squeezed by corporate profiteering.”

During a radio interview Saturday with Larry Kudlow, Bessent said “tariffs can’t be inflationary because if the price of one thing goes up, unless you give people more money, then they have less money to spend on the other thing, so there’s no inflation.”

“Inflation comes through either increasing the money supply or increasing government spending, and that’s what happened under Biden,” he added.

Still, many economists continue to warn that tariffs — especially the blanket tariffs Trump has promised — will drive up prices.

Goldman Sachs told clients in a note on Sunday evening that the biggest risks to inflation are linked to politics – particularly tariffs. The bank warned that a 10% tariff across the board would increase core prices by about 1% and delay a return to the Federal Reserve’s 2% inflation target.

Bessent beat Cantor Fitzgerald CEO Howard Lutnick, who was also in the running to become Treasury secretary and had been endorsed by Elon Musk. Trump instead picked Lutnick for Commerce Secretary, another key role, though not as prominent as the Treasury Department.

“Lutnick is a bull in a china shop. CEOs across the industry were concerned about Lutnick’s personality,” Sonnenfeld said.

Anthony Scaramucci, the CFO and former Trump adviser who has since become a fierce Trump critic, praised Bessent the X as a “great guy and a safe and steady pair of hands for the country.”

An ‘excellent’ choice

Jay Timmons, the manufacturing CEO who in January 2021 urged Vice President Mike Pence to invoke the 25th Amendment to remove Trump from powerpraised Trump’s decision to hire Bessent.

“Scott’s deep expertise in financial markets and his dedication to promoting economic growth make him an excellent choice to lead the Treasury Department,” Timmons, executive director of the National Association of Manufacturers, said in a statement minutes after Trump announced the pick .

Timmons expressed hope that Bessent, who said the Biden administration was “out of control with government spending,” will help make Trump’s promise to extend the 2017 tax law a reality.

Left-of-center economists and progressives have concerns about the same outcome.

Larry Summers, who served as Treasury secretary during the Clinton administration, warned of a supply shock under Trump’s economic plan in an interview that aired Sunday with CNN’s Fareed Zakaria. He argued that higher prices will be caused by even bigger tariff hikes than those Trump imposed in his first term, as well as a labor shortage that hurts farmers and home construction.

Summers said he had “little doubt that the Trump program is a far greater stimulus to inflation than anything President Biden enacted.”

“For all his talk about taking care of working-class Americans, President-elect Trump’s choice of a billionaire hedge fund manager to lead the Treasury Department shows that he just wants to keep a rigged system that only works for big business and the very wealthy. ” Tony Carrk, executive director of the progressive group Accountable.US, said in a statement Friday. “Scott Bessent’s first order of business will be to push trillions of dollars in more tax giveaways to the very wealthy.”