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After a messy, public competition between hopefuls, President-elect Donald Trump nominated hedge fund manager Scott Bessent to be the next Treasury secretary.
On today’s Big Take DC podcast, hosts Saleha Mohsin and David Gura discuss why Trump chose Bessent, and how Bessent might approach the job.
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Here is a lightly edited transcript of the conversation:
David Gura: The hedge fund manager Scott Bessent is President-elect Donald Trump’s pick … to be the next Secretary of the Treasury, and he finally got the nod … after a very public – and kinda messy! – competition.
Saleha Mohsin: It was a knife fight for a very stressful job.
Gura: Bloomberg’s Saleha Mohsin covered that contest, as it played out – on television, on op-ed pages, and at Mar-a-Lago, where Trump has been preparing for his second term.
And it dragged on for weeks:
Mohsin: Scott Bessent looked like he was tipped to get the job, easy peasy. And then, he left town, he left Palm Beach, and Howard Lutnick, the co-chair of Trump’s transition efforts, and CEO of Cantor Fitzgerald, he moved in.
Gura: And, Saleha says:
Mohsin: We had Lutnick out there, talking and having his allies come in for him, and against Bessent, and then you had Bessent doing the same thing…
Gura: That strategy backfired.
Saleha says it made the president-elect so irritated, that he brought in more candidates, including Kevin Warsh, a former Federal Reserve governor, and Marc Rowan, the CEO of Apollo Global Management.
In the end, Trump nominated Lutnick to run the Commerce Department… Warsh reportedly said he’s more interested in the job of Fed chair, when that opens up.
So, Bessent got Treasury:
Gura: What was it that sort of tipped things in his favor at the end?
Mohsin: It might have been that no one really, other than Bessent, really wowed Trump.
Gura: Trump has picked someone who knows Wall Street, and that seems to have impressed Wall Street: stocks rose and the dollar weakened, after the president-elect announced his decision.
I’m David Gura, and this is the Big Take DC, from Bloomberg News.
Today on the show, I'm joined by my co-host Saleha Mohsin to talk through… who is Scott Bessent? And if he’s confirmed by the US Senate, how will he approach the job, and advance his boss’ economic agenda?
So President-elect Trump made this announcement after the market closed on a Friday. I think I got the email at 6:55 Eastern time. As you and our colleagues have talked to investors, what are they telling you about the president-elect's pick?
Mohsin: Markets seem happy. They see Bessent as bringing stability, which is something that we had in Trump 1.0. You know, as much turnover as you saw in Trump's Cabinet, Steven Mnuchin stayed as Treasury secretary for all four years, and he was able to leverage relationships because people knew this man is going to stay, and he understands the plumbing of the global financial system.
You know, that's something that markets really want. They want stability, and if Bessent can somehow manage to provide that, I think he'll end up being a successful Treasury secretary.
Gura: What kind of career has Scott Bessent had up to this point? What's his background?
Mohsin: Yeah so he worked for George Soros. He was involved in the investor bet that broke the pound in the early ‘90s. And so he comes with a keen interest in currency policy. And you can tell he talks about that a lot and Donald Trump talks about dollar policy a lot.
He also set up and ran his own hedge fund since about 2015 or 16, I think, he has been overseeing that and it was about a year or a little over a year ago that he re-entered Trump's orbit, and started looking at Trump's policies and saw that Trump's stock was going to go up and he was right.
Gura: You said “re-entered” Trump’s orbit. When did they meet?
Mohsin: So, Bessent told me that he has known the Trump family for like 30 years, uh, and I think he knew Trump's brother, and so he said, Oh, well, Donald Trump probably knew my face, but didn't quite know exactly who I was, but he was close to Donald Trump Jr. That was sort of his door into Trump world about a year ago, and that's how he got a first meeting with Donald Trump.
Gura: What do your sources say about how the work that he's done, so working with these big hedge funds, is likely to shape his perspective on this job, and maybe it would just be useful for you to describe all that a Treasury secretary has to do. It's a huge remit.
Mohsin: Yeah, it's, it's huge. People like to call the Treasury secretary the Chief Financial Officer of the United States, but that actually only refers to one third of the job. A Treasury secretary oversees debt issuance. And that's somewhere we could see from a Treasury secretary Scott Bessent, a little bit of creativity, maybe in how our massive deficit is issued and how that's structured and, and sort of the tenor of notes and things.
He's also going to be involved in tax policy and financial stability, international economic diplomacy. So being the representative for that at G7 and G20 meetings. And then the other big component is national security, and foreign policy by way of economic sanctions.
Gura: As you talk to investors about him, do any of them express any reservations about him not having experience in Washington, not being a creature of D.C.? Not being someone like Janet Yellen, for instance, who spent the bulk of her career in Washington in a lot of these big, high profile jobs doing quite a bit of management?
Mohsin: So there's always a steep learning curve for a Treasury secretary, particularly when it comes to dealings with Congress.
The example that comes up frequently, a more recent kind of screw up there or confusion or misreading of the room is Steven Mnuchin. I think it was 2017, he had to raise the debt ceiling and he went into a room full of Republican lawmakers and it was a private conference and said, just raise the debt ceiling for me. And they burst out of that room telling every reporter that this is what he said, “for me.” We're not going to do it for you. We serve the American people, not you. And it was such a blunder.
You know, Steven Mnuchin came in, he didn't know any lawmakers very closely or how all this stuff really worked from a Washington perspective, did not have experience in the public sector.
Tim Geithner knew. He came from the Federal Reserve. He'd been at Treasury as a civil servant in the 90s. Hank Paulson had no experience on that front. You would, you would hope people like that, they come in without hubris of knowing what you don't know and then relying on people to help you navigate. And also just understanding that you come from a world where it's about relationships and deal making, um, and just learning on the fly.
You know, Bessent comes from Wall Street, but he doesn't have the same experience of some of the big heavyweights that we've seen as Treasury secretary. So Bob Rubin, Hank Paulson, Steven Mnuchin, they loomed large because of their Goldman experience. Paulson, he was CEO, and he said that something about the way at Goldman you learn about serving the client, not serving your own ego, really prepared him to work in government, where his biggest client was the President. So Bessent doesn't come from that sort of traditional part of Wall Street.
Gura: After the break… What we know about how aligned Bessent is with Trump, and what that could tell us about how Bessent may approach the role of Treasury secretary....
Scott Bessent, President-elect Donald Trump’s nominee to be the next treasury secretary, helped Trump hone his messaging – about the economy – on the campaign trail.
And when Trump announced he’d picked Bessent to lead Treasury, he said will quote, “support my Policies that will drive U.S. Competitiveness, and stop unfair Trade imbalances, work to create an Economy that places Growth at the forefront, especially through our coming World Energy Dominance.”
How much uncertainty is there, Saleha, about where Scott Bessent stands on the president-elect's biggest economic priorities?
Mohsin: We know quite a bit, David, because he was, Bessent was kind of openly auditioning for this role. He would meet with reporters, do ed boards. He's written op-eds for the Journal, for The Economist, for Fox, talking about different policies. I think it was Friday, November 15th, Bessent wrote an op ed talking about how supportive he is of tariffs as a tool of foreign policy, trade policy, national security.
And so markets now are digging into those comments, things that he's said, they kind of see someone with a Wall Street pedigree like Bessent as someone who might be a bit of a, a hindrance to Trump's more protectionist or populist tendencies, but, that's the open question to me, is how much say will Scott Bessent as Treasury secretary have over tariffs, if you have Howard Lutnick over at Commerce, who's also overseeing USTR, the US Trade Representative's office, to focus on tariffs and trade. I think markets should kind of keep an eye on how much sway Bessent really has with tariffs.
Gura: We had this knife fight play out in the run up to these nominations of Howard Lutnick and Scott Bessent. Are people confident that the fight ends there, that when that moves into the Cabinet room, we're not going to see the same kind of, of fighting?
Mohsin: No, people are not confident in that at all. [laughs] In the first administration, we saw these kinds of knife fights play out. You know, cabinet officers leaking to the press or going on Fox News to make their case for the policy that they want implemented over someone else. And it doesn't always bode well.
Lutnick has secured a pretty big job. He has Commerce secretary, he's also overseeing USTR, and that's a new idea. Trump decided to put that under Lutnick's purview, so the two men do not get along. That's why it didn't turn out where one is NEC director and one's Treasury secretary, because Trump and the team realize these two men can't work together.
Gura: Scott Bessent said in an interview over the weekend, his top priority is going to be taxes. Is he going beyond just pushing for the continuation of the so called Trump tax cuts? Is it, is it bigger than that?
Mohsin: Oh, I, yeah, I want, I have so many questions on how tax policy is going to unfold because you know, the first hundred day plan is a huge thing that we're going to be watching for as we see officials rolled out and policy plans rolled out and, and signals given. Trump's 2017 tax cuts, some of those tax cuts expire at the end of 2025, I think. Republicans own Congress, both chambers in their hands. So let's see how far they can get.
But I don't know that Bessett has said anything, in grave detail, uh, about where that would go. We know publicly Donald Trump has talked about a lot of different kinds of tax cuts.
Gura: Bessent is someone who has not shied away from talking about the deficit. He talked about it during an interview on Bloomberg Television, back in October:
Bessent: I am very concerned about what is happening right now. We have never had a budget deficit like this. We are at 7% of GDP in terms of the deficit. We've never had this deficit. When it's not a recession, not a war. And what do we have to show for it?
Gura: How does he plan to reduce the size of the deficit?
Mohsin: Yeah, I love deficit talk because everyone comes up with these great ideas of how to reduce the deficit, but Congress needs to do that, right? A Treasury secretary can lead the charge. Congress is the keeper of the purse, when it comes to spending and, and taxes.
Any time an administration or a government has accomplished that, it is because Wall Street or investors or markets have thrown a tantrum that you have too much deficit. And I don't see how a Trump administration or Congress makes the very difficult trade offs and cuts in spending that will be unpopular with voters unless they can blame it on markets or blame it on someone else.
Gura: Scott Bessent's going to play a role in picking the next chair of the Federal Reserve, advising the President elect on that.
Mohsin: Yeah, let's talk about the Fed. Donald Trump thinks that presidents should have a say on interest rates. We don't know what that really means. And so I don't know maybe this is some kind of creative thinking on Bessent’s part to say, okay look, he really wants to fire Powell or he really wants to set monetary policy or have a say. Maybe the way to do it where we're not just causing a constitutional and markets crisis by sacking the Federal Reserve Chair, we do it by creating this shadow Fed Chair situation where you nominate or announce the name of who you will pick, send to the Senate for confirmation to be the next Federal Reserve Chair, and that person is providing forward guidance on what they would do, so markets start to look to that person's comments over the sitting Federal Reserve Chair. But this is my number one question to Scott Bessent right now, is like how would that play out and how seriously should we take this plan?
Gura: Effectively like a Fed chair in waiting.
Mohsin: Yeah. Yeah.
Gura: You covered the Treasury Department when Steven Mnuchin was running it, and he was there, as you said, for all four years of Donald Trump's first term. If Scott Bessent is confirmed, what is going to determine how successful he is at the job?
Mohsin: With Trump, it's always maintaining Trump's trust, and always making sure you're aware of who he's meeting with and trying to be the last person in the room as Bessent learned when he left Palm Beach and thought that he had bagged the job of Treasury secretary and then it kind of blew up.
Mnuchin learned that. Steven Mnuchin learned that if you leave the president with Peter Navarro, then the trade advisor and like a you know a known China hawk, in the room with president too long, Trump is going to start asking questions like can we aggressively intervene in the US dollar to make it weaker and can we do x y and z that might really blow up, um, foreign relations or economic relations with other countries? So I think Scott, Scott Bessent will have to learn sort of to make sure that you stay in the good graces of the president, stay visible and are keeping tabs and keeping Treasury-related policies firmly in the hands of the Treasury department and not let others encroach on that remit.
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