‘Huge relief.’ CEOs exhale after Trump taps Scott Bessent to lead Treasury
New York
CNN
—
Business leaders say they are relieved President-elect Donald Trump made a safe choice to lead the Department of Treasury after more unconventional selections to other cabinet posts.
Hedge fund executive Scott Bessent survived an internal squabble over the role of Treasury secretary, a key position that will face almost immediate deadlines and pressures.
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 the worries of business leaders.
"There's huge 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 a fan, too. Dimon thinks very highly of Bessent and believes he's 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 hires 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 act as Trump's quarterback, executing his economic agenda. And for this key position, Trump opted to go with a pick that is not expected to draw a contentious confirmation battle.
Sonnenfeld, known as "the CEO Whisperer" for his rolodex of business contacts, said the hope of Corporate America is that Bessent can moderate some of Trump's more aggressive campaign promises that mainstream economists fear will reignite inflation.
President-elect Donald Trump attends a SpaceX launch on November 19 in Brownsville, Texas.
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That includes mass deportations that threaten to starve key industries of workers, potentially influencing Federal Reserve policy and across-the-board tariffs on all $3 trillion of US exports.
"Bessent supports using tariffs as a cudgel. He's supportive of selective tariffs. But he understands Smoot-Hawley tariffs exacerbated the Great Depression," Sonnenfeld said, referring to the infamous 1930 tariffs imposed by Congress. "He doesn't want a second Smoot-Hawley."
Of course, even if Bessent is a voice for moderation in the Trump debates on tariffs and deportations, it doesn't mean he will necessarily win those arguments, which will ultimately be decided by Trump himself.
Not inflationary
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 is no inflation."
"The inflation comes through either increasing the money supply or increasing the government spending, and that's what happened under Biden," he added.
Kudlow, who served as the director of the National Economic Council under Trump from 2018 to early 2021, called Bessent "a person of enormously good common sense."
Bessent beat out Cantor Fitzgerald CEO Howard Lutnick, who was also in the running to be Treasury secretary and had been endorsed by Elon Musk. Trump instead picked Lutnick for Commerce secretary, another key role, though not as prominent as Treasury.
"Lutnick is a bull in a China shop. CEOs across industry were worried about Lutnick's personality," said Sonnenfeld.
Anthony Scaramucci, the finance executive and former Trump adviser who has since turned into a fierce Trump critic, praised Bessent on X as a "great guy and a safe and stable pair of hands for the country."
An ‘outstanding' choice
Jay Timmons, the manufacturing trade group CEO who in January 2021 called for Vice President Mike Pence to invoke the 25th Amendment to remove Trump from power, praised Trump's decision to hire Bessent.
"Scott's deep expertise in financial markets and his dedication to fostering economic growth make him an outstanding choice to lead the Treasury Department," Timmons, the CEO of the National Association of Manufacturers, said in a statement minutes after Trump announced the selection.
Timmons expressed hope that Bessent, who said the Biden administration had "out-of-control government spending," will help make Trump's promise of extending the 2017 tax law a reality.
Left-of-center economists and progressives have concerns about that very 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 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 homebuilding.
Summers said he had "little doubt that the Trump program is a far larger stimulus to inflation than anything that President Biden enacted."
"For all his talk of looking out for working class Americans, President-elect Trump's choice of a billionaire hedge fund manager to lead the Treasury Department shows he just wants to keep a rigged system that only works for big corporations and the very wealthy," Tony Carrk, executive director of progressive group Accountable.US, said in a statement on Friday. "Scott Bessent's first order of business will be to push trillions of dollars in more tax giveaways to the very well-off."
