The importance of being Scott Bessent

The financial markets have held up in the face of Trump tariffs and assorted shocks during the year. Much credit must surely go to the US Treasury Secretary Scott Bessent. 

Bessent is a financial markets player of repute. He made a huge fortune in the markets. He knows financial markets and, more importantly, he respects them. The calibration of various actions as well as the calibration of comments from the US administration are largely responsible for the markets not buckling under the upending of the free trade regime under Trump-II. 

To get into Bessent's mind, it's useful to read the FT story on Bessent that is based on two interviews with him.

Bessent sums up his approach succinctly:

We want the most America-first policies that are possible, without incurring market wrath.

Bessent is in the forefront of the transformation of the policy paradigm- and more:

In just nine months, Bessent has staunchly promoted Trump’s aggressive tariff policies, championed the president’s effort to overhaul the Federal Reserve — including his attempt to fire governor Lisa Cook — and ushered in a new era of sweeping deregulation and tax cuts, including the loosening of crypto rules and the promotion of stablecoins. But he has also brought Maga to the US Treasury in other ways: vowing to use the Internal Revenue Service to probe left-leaning organisations the government suspects of fuelling political violence

How does he differ from his predecessors?

Unlike most of my predecessors I have a very healthy scepticism of elite institutions and elite opinion, whereas I think they didn’t,. But I have a healthy regard for the market.

The critics have been wrong about the markets crumbling under the onslaught of Trump tariffs:

Since he was sworn into the job on January 28, the S&P 500 equity index has risen about 12 per cent, while the 10-year Treasury yield, a proxy for long-term borrowing costs, has dropped by slightly more than half a percentage point over the same period to 4 per cent. Please use the sharing tools found via the share button at the top or side of articles.  .... “Where the hell is the market risk? They’ve just been wrong.”  

What Trump is attempting has the potential to derail the markets. Give credit to Trump for choosing the right person to manage the markets.