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Over the last week, President-elect Donald Trump has announced his nominees for the top jobs in his administration. But one key position that hasn’t been filled yet is Treasury secretary, and the person Trump picks will play a crucial role in shaping US economic policy.
Senior Washington correspondent and host Saleha Mohsin joins David Gura to tick through the top candidates under consideration and how each might shape the Treasury’s priorities if chosen and confirmed.
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Here is a lightly edited transcript of the conversation:
David Gura: It’s been just over a week since Donald Trump was reelected… and he hasn't wasted any time putting together his Cabinet:
BTV: Trump is expected to name Rubio as Secretary of State—
BTV: Matt Gaetz nominated by President-elect Donald Trump as his attorney general.
BTV: Representative Mike Waltz is in line to be National Security Advisor—
Gura: One of the Bloomberg reporters tracking who Trump is picking for his Cabinet… is our very own Saleha Mohsin.
Mohsin: During the first Trump term, I covered the Treasury Department. So that's Steven Mnuchin for all four years.
Gura: Saleha is keeping her eyes on Treasury this time around… because the person Trump nominates for that job would play a major role in shaping economic policy.
And … we’re still waiting for Trump to tell us who he’s picked…
Mohsin: We've seen a slew of announcements come through for posts all the way down to who is going to be the ambassador to Israel but we have not heard some of the key economic policy picks that are gonna make a very big difference to Bloomberg readers, to traders, but also just to the average American and their cost of living.
This is the Big Take DC podcast from Bloomberg News. I’m David Gura.
Today on the show: Saleha and I look at who Donald Trump has tapped to lead his new administration… and what those picks tell us about his priorities.
Gura: Saleha, it seems like this Cabinet is coming together pretty quickly. Am I right in my perception of that? Are we getting these names and nominations and appointments pretty fast?
Mohsin: They are coming quickly. They're coming in an order that we didn't really expect. Usually we see the White House Chief of Staff come out first, which it did happen this time. Susie Wiles was announced pretty quickly. But then we're used to seeing Secretary of State and Treasury secretary announced very quickly after that.
Gura: How different is the way this is playing out from what we saw last time when he was elected back in 2016?
Mohsin: It's actually much more organized. This time Susie Wiles, who was Trump's campaign manager and was credited for running a very stable and almost leak-free campaign, has become Chief of Staff for the White House and so now she is running point on transition announcements and how Trump can come to his decisions. As they're having interviews and people are coming through Mar-a-Lago to talk about different priorities, we're seeing things come out a little bit more methodically.
Gura: You mentioned Mar-a-Lago, the president's club in South Florida. What is the scene there like?
Mohsin: Oh, it's a revolving door of people. Howard Lutnick, who is in the running for Treasury secretary has been there for more than a week now. Scott Bessent, who was also in the running for Treasury secretary, was down there recently. We have Susie Wiles down there, Bob Lighthizer, who was Trump's US trade representative during the first administration and now is under consideration for a top economic policy job including Treasury secretary, he is also down there.
Gura: You mentioned a minute ago, Susie Wiles, who is his campaign co-manager, Howard Lutnick, who's running this transition team. To what degree are they influencing this process?
Mohsin: That's a really interesting question. With Donald Trump, he makes his own decisions. He likes to see a bit of tension in the room. He likes to see different ideas coming forth and see how his different advisors react to different ideas. Trump is known to float names, get them out into the media to see who would be happy, who would not be happy.
I will say when it comes to the economic policy positions that we're watching the most closely here at Bloomberg, especially Treasury secretary, we expect him to use his first term playbook, and look for a secretary with Wall Street chops.
Gura: How much has that mattered to the president-elect throughout this process, having the backing of traditional Wall Street as he makes this pick?
Mohsin: It does sound like Trump wants someone with Wall Street pedigree for the job. And most of the people that he's looking at do have that in common. His first Treasury secretary, Steven Mnuchin, he lasted all four years, which was rare in the first term for any Cabinet officer to weather all those storms that we saw from 2017 to 2021.
And I think Trump did realize that having stability in economic policy-making, a Treasury secretary who can withstand the pressures of not just government, but also the unique features of serving under Trump, who has a very different governing style, shooting from the hip, a lot of policies made over social media. Sometimes it's like the last advisor in the room is the one whose argument kind of wins out, those kinds of things. If it's someone who can last through that, and give markets and Congress, and, um, international economic allies that kind of stability, I think he is finding that that's a benefit.
But at the same time, there is a little bit of regret that maybe Steven Mnuchin was lukewarm on tariffs and served as a bulwark to some of Trump's more surprising protectionist economic proposals and so this time, he's coming back into government not just on economic proposals, but all across the board, knowing that I want to make sure that the people that I have on my Cabinet who are implementing the policies that I've been talking about for years now are people who really do align with that vision and aren't going to try to stop anything from happening.
Gura: I wonder if there is an overarching theme to the personnel choices that he's made so far. So we don't have a full Cabinet yet, but when you look at who he has put forward, what ties them together?
Mohsin: I would say fealty. Trump learned in the first term, after having so much turnover in key jobs, especially in the White House chief of staff role, especially in the national security and foreign policy realm, and some of the economic posts, not Treasury secretary, but you know, White House National Economic Council Director, those jobs turned over so much.
People were fired by a tweet. People left. They quit. They were edged out, or knifed out by each other. And this time we are seeing that infighting that was a key feature of Trump One may not be a feature in Trump Two. It seems that he has less tolerance for that kind of behavior.
Gura: Coming up, we run through who Trump is considering to be his next Treasury Secretary, and what the different candidates for the job could bring to the department…
As Donald Trump has put together his Cabinet, and picked senior officials for his next term, there have been some surprises. And of course that could happen again, with his pick for Treasury secretary. But Bloomberg's Saleha Mohsin says, there are four men who are considered frontrunners for the job.
Gura: Let's dig into that a little bit more. This is your bailiwick. The position of Treasury secretary, of course, is a key job under any administration. How important is it to President-elect Trump?
Mohsin: Oh, incredibly important. He has a huge economic agenda ahead of him. He is ringing forth protectionism, which is something that our allies and adversaries around the world are nervously watching. What kind of economic agenda does that mean if the US is even more isolationist, going forward? So he has talked about 10% Tariffs across the board for pretty much everyone and a special 60% tariff rate, maybe for China.
He's also talked about the dollar. It needs to stay the world's reserve asset, but maybe it's also too strong. And he's also talked about the Federal Reserve, how a president should have a say in interest rates and how the Fed manages the rate path. And which economic policy advisors he chooses, whether it's enough people with markets know-how, and who understand the plumbing of the global financial system and can tell Trump what would markets react to in a positive way versus a negative way, what could really wreak havoc in financial markets, which would cause Trump a lot of headaches. And also, he doesn't like that. He likes to see market-positive economic policies going forth. Those are a couple of the things that are at stake, and a lot of it comes down to personnel.
Gura: Let's start with Scott Bessent, hedge fund manager, somebody who has been speaking out on behalf of the campaign, now pretty vocal during the transition. What does he bring to the table?
Mohsin: So Scott Bessent came into Trump's orbit only in the past year to 15 months. He has slowly won the support of MAGA Republicans who are very close to Trump. He has been out in, in the public, on Bloomberg TV, on other networks, writing op-eds for different outlets, and visiting journalists in their offices around Washington boosting all of Trump's economic policy proposals, which include tariffs, which include maybe encroaching on the Federal Reserve a little bit, he's talked about US China policy, he's talked about the dollar, he's talked about financial regulation. All of the things that Trump holds up as key pillars to his economic agenda.
But he's also emerged as a key advisor to Trump. Trump has talked about Scott Bessent a lot in his rallies saying, you know, that, you know, that ‘there's a great guy right there. Scott is fantastic.’ And Bessent also helped Trump write some of his key economic policy speeches in the last few months, particularly one at the Economic Club of New York, which came with a lot of fresh news on what kind of agenda Trump would have going forward.
Gura: I know of him as a macro investor. What's his reputation on Wall Street?
Mohsin: He's known as someone who really understands global capital markets. He's known as someone who has actively traded in markets and can speak publicly about economic policy. He is a little bit unknown in Washington, which is not unusual for a Treasury secretary should he get the job.
He has not had a government job before. And so there is some questions emerging about whether he is cut out to deal with sort of the political thickets of Congress, having to work with lawmakers in the House and the Senate in both parties to do things like raise the debt ceiling, you know, renew some of the tax cuts that are going to expire next year.
But he is known as someone who markets see as their own person, which is quite important for a Treasury secretary, because there are moments during any kind of economic or financial crisis, large or small, no matter where it's going on around the world, where a Treasury secretary has to lean on their personal credibility, their personal gravitas in order to calm markets and serve as an emollient.
Gura: Tell us if you would about Howard Lutnick.
Mohsin: He has emerged this year as a really close advisor, and like Bessent, he has raised millions of dollars for the Trump campaign, he's also been a donor, giving money to Trump, and also served as a bit of a surrogate, also hitting the airwaves, going out there, boosting proposals, touting policies.
And then he became the co-chair of Trump's transition efforts. But he might be playing a little bit of a, you know, the Dick Cheney playbook where he has decided I'm running transition efforts, and I'm also going to see if I can get a job that I want by putting my name in the ring. And, you know, the latest reporting from Bloomberg is that that's something that is chafing Trump allies and key advisors. They don't love that Lutnick is somewhat aggressively jockeying for a job, specifically Treasury secretary.
Gura: We saw someone else who is reported to be in the running, John Paulson, drop out of the race to be Treasury secretary, citing the fact that his personal finances were just too complicated. Is that a factor that's affecting others that we're talking about here?
Mohsin: Yeah, just like last time, that is a bit of a pattern that these are very rich men who are looking to come to the administration. There are ways around that. If you are willing to give up the idea of being a Cabinet secretary, you can come in as a special government employee, which is something that Elon Musk is doing, who's going to be heading up, apparently, government efficiency, a newly created department.
And so that means you don't have to divest. But Treasury is unique. If you are a Treasury secretary, you have a hand in public financing. So that's the, you know, almost $30 trillion market for Treasuries that are out there. Also financial regulation. So that affects banking stocks. You also oversee the IRS.
And you also oversee US currency policies, so the currency market gets involved there. So you have, you know, these secretaries have to divest from a large amount of their investments. So the problem, the key problem for John Paulson is that he has an undisclosed and purportedly large investment in Fannie Mae and Freddie Mac, which are two government-owned mortgage giants, and so any Treasury secretary would also, could have a say in the future of those two vehicles.
And so we are seeing that someone like Lutnick or someone like Elon Musk or even John Paulson, they would struggle to find a way out of all of those investments and maybe even take a loss in certain cases in order to take one of these jobs.
Gura: So I guess one way you can ascertain who's in the lead here is by how often the President-elect is name-checking these individuals. You mentioned that he would invoke Scott Bessent's name. I was covering the campaign a bit and heard him bring up Bob Lighthizer a lot.
As you said, he was the President-elect's former US Trade Representative. What does he represent when you look at sort of candidates for leading Treasury?
Mohsin: Yeah. So Lighthizer is a known China hawk. He has already started creating plans for tariffs that would involve China and the European Union. So if he ends up in some kind of a position where he is not a Cabinet secretary, but is able to oversee just the trade policy portfolio, that means he wouldn't be distracted by other parts of, let's say Treasury secretary, which would include financial stability work, debt management, economic sanctions, overseeing the Internal Revenue Service, things like that.
But he does want to manage trade policy. He was pretty aggressive with tariffs the first round and Trump really admired the work that he did.
Gura: Last name I'll ask you about is Jay Clayton, the former chair of the Securities and Exchange Commission, left that job, joined Sullivan and Cromwell, white shoe law firm here in New York.
Mohsin: He's a little bit different than the other three candidates, right? He is not at his core, a Wall Street guy. He's worked on M&A deals, but as a lawyer, not as an investor, or hedge fund manager, or trader.
Now one thing to remember is that with all of these candidates, yes, all four of these names that we've just talked about are in the running for Treasury secretary, including Jay Clayton, but each of these people could also fit into other jobs in the Trump administration. You know, you also need a National Economic Council director.
You also need someone to run your Council of Economic Advisors. So we should just bear in mind that some of the names that we're talking about could end up in the administration, but not necessarily Treasury secretary.
Gura: I wanted to ask you how soon you think we'd feel the imprint of this new Treasury secretary?
Mohsin: Well, when it comes to markets, we're already seeing the imprint of a Trump presidency and Donald Trump himself. I think that as soon as a name is announced, we should expect even just a brief blip in markets particularly if it is Bob Lighthizer, that is one thing that I know investors that I've spoken to in the last couple of months have said that they're really, really wondering, like, kind of worried.
Is it going to be Bob Lighthizer? That's going to be a little bit more explosive for the key policies and agenda items that investors tend to be most concerned with. It just means that maybe a little bit more aggressive decoupling between US and China and more aggressive with allies in terms of tariffs and trade policy.
So we could see a market reaction in that. And then there also might be a reaction when it comes to the US dollar, which has moved around a lot in the last couple of weeks. It's been very, very strong, under Donald Trump just by, you know, way of Trump being elected. And, you know, Scott Bessent, just to talk about him for a moment, he did say on Fox a couple of days ago that the dollar loves Trump, so a strong dollar is a reflection of approval for Trump.
But we could also then expect to hear some comments on, is this a secretary designate who is going to then really work hard to implement weaker dollar policies that Trump has often talked about.
Beyond that, I think we're going to find out, I think soon what the first hundred days or, you know, Q1. Tasks are going to be, in terms of economic policy, I think in terms of, like, how quickly they can resolve any kind of debt ceiling standoff issues, but also tax policy is going to be the first one that needs to be resolved by the end of 2025 when Trump's tax cuts from 2017, some of them expire.
And that's sort of the first chance for Trump's economic policy team, probably led by the Treasury secretary, to have an impact on American consumers. So those are sort of the key points that we could see an imprint kind of quickly, in markets, which can effect, eventually trickle down to the economy.
Gura: When it comes to economic policy, how important is stability?
Mohsin: It's hugely important. Markets want to know, they want predictability and stability. They want to know where policy is headed. You know, personnel is policy. So if they see that there is personnel stability that helps. Also, when you have things like, you know, when COVID hit, at that time, there was only one person on the economic policy team in the Trump administration who had any kind of relationship with Nancy Pelosi, who was then the House speaker, and that was Steven Mnuchin.
So Mnuchin and Pelosi were able to talk to each other, find common ground and pass a COVID relief bill, you know, a trillion dollar COVID relief bill rather quickly when no one else in the Trump administration wanted to talk to Pelosi and so the fact that those two were able to cultivate a relationship comes from the fact that there was continuity in who was running and overseeing economic policy.
Gura: Saleha thanks very much.
Mohsin: Happy to join.
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