hedge fund chief Scott Bessent on Friday designation Becoming US Treasury Secretary is offering bond investors a glimpse into the incoming administration’s broad economic agenda after a lengthy search that included a number of prominent contenders.
The $28 trillion US Treasuries market was already closed for the week when Bessent, who runs the Key Square Group macro hedge fund, was officially appointed by President-elect Donald Trump. Until trading resumes in the Asian session on Monday, investors and strategist Bessent await further details on fiscal policy and next steps.
Here’s what Wall Street investors and strategists are saying:
Glen Capelo, who spent more than three decades on the bond trading desks of Wall Street and is now a managing director at Mischler Financial Group, said: “Scott is a fiscal hawk and will certainly be positive for the economy and the markets.”
“He wants to keep spending. Bessent wants the Secretary of Finance to join the markets.’ The gist of Bessent’s tariff policy is that companies can have a certain amount of time to make sure they’re fueling the U.S. economy or else face tariffs, Capelo said.
“It is not that the sky is falling that inflation is coming who talk about the philosophy of the tariff. So I think it’s going to be great for America.”
John Fagan, director of Markets Policy Partners: Fagan, who led the U.S. Treasury’s markets monitoring team from 2014 to 2018, said Bessent’s past comments and opinions may change as he faces the reality of the Treasury secretary role. “When people are in the markets, their commentary on the markets is indelible with what their book is.”
However, “When decisions are made around Treasury issuance, these are enormous decisions made with large groups of people around the table and enormous amounts of data and considerations that come from really stable and predictable.”
Priya Misra, portfolio manager at JPMorgan Asset Management: “While the Treasury secretary ultimately sets the administration’s fiscal policy, I’m encouraged that the person in charge knows the markets very well.”
“Bessent has talked about a gradual approach to tariffs and the need to control the deficit. This suggests that Bessent wants to avoid a market reaction that would limit the administration’s goals in trade and tax policy.’
“The only area where there might be some concern would be the comments about a ‘Shadow Fed Chair,’ but I think he knows that an independent central bank is a key reason for the US dollar to be the reserve currency and the US Treasuries to be a safe haven. I think the administration’s approach to monetary policy he can give his opinion, but the Fed will remain focused on its dual mandate.”
Zachary Griffiths, head of US investment grade and macro strategy at CreditSights: “Having a micro hedge fund guy is a good thing for the markets; someone who understands how that side works is good.”
“To me, his views related to the Fed — somehow creating a lame-duck President Powell — are a little worrisome. I know Bessent has since kind of retracted that recommendation. But that’s the only thing that stands out to me.” It keeps that oversight of that event in play if they were to take a more unorthodox approach to their relationship with the Fed.”
Andrew Brenner, head of international fixed income at NatAlliance Securities: “He’s been Trump’s economic adviser for a long time, and I think he understands Trump.”
“With Bessent and Trump at the Treasury, I don’t think they’re going to try to undermine the independence of the Fed.”
Ed Al-Hussainy, strategist at Columbia Threadneedle
“I don’t expect the Treasury Secretary to have an ambitious independent agenda.”
“The Secretary of Finance will have three tasks. First, shape the scale and scope of the fiscal response in the next recession. Two, determine the maturity structure of the Treasury debt as borrowing increases next year. Three, to have a say in the negotiation of tax policy next year.”
Gregory Faranello, head of US rates trading and strategy, AmeriVet Securities
“The process was long and thoughtful. Bessent is a great choice. He understands global markets, which is key to the role. And the markets trust him.”
