Business leaders and financial markets have breathed a sigh of relief after President-elect Donald Trump nominated hedge fund executive Scott Bessent as his pick for Treasury secretary. The move is seen as a safe choice, given Bessent’s background in global investing and his ability to support both Republicans and Democrats.
Bessent, 62, has worked with renowned investors such as Jim Rogers and George Soros. His nomination is expected to ease concerns about Trump’s economic agenda, which some economists fear could reignite inflation. However, not everyone is pleased with the choice, with left-of-center economists and progressives expressing concerns that Bessent’s expertise will benefit wealthy investors rather than families squeezed by corporate profiteering.
Treasury yields have ticked down, and the dollar has fallen since Trump announced his decision to nominate Bessent for the role. The Dow reached a new record high on Monday, with the S&P 500 and Nasdaq Composite also seeing gains. While some welcome the selection of Bessent as a pragmatic choice, others worry that it will lead to increased tariffs, which they believe will boost prices.
Bessent’s views on tariffs are cautious, with the nominee stating that “tariffs can’t be inflationary.” However, many economists warn that tariffs, especially those imposed by Trump, will have negative effects on inflation. Goldman Sachs has warned that a 10% across-the-board tariff could boost core prices by about 1% and delay a return to the Federal Reserve’s 2% inflation goal.
The nomination of Bessent marks a significant departure from some of Trump’s other unconventional choices for cabinet posts. While business leaders are relieved, it remains to be seen whether Bessent will successfully moderate Trump’s more aggressive campaign promises.
Source: https://edition.cnn.com/2024/11/25/business/ceos-react-bessent-trump-treasury-pick/index.html