(Bloomberg) — Hedge fund chief Scott Bessent’s nomination Friday as U.S. Treasury secretary offers bond investors a glimpse of the new administration’s broad economic agenda after an extensive search that included several high-profile candidates.
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The $28 trillion U.S. Treasury market was already closed for the week when Bessent, who runs macro hedge fund Key Square Group, was officially appointed by President-elect Donald Trump. Until trading resumes at the start of Monday’s session in Asia, investors and strategists are awaiting more details on Bessent’s views on fiscal policy and his next steps.
Here’s what Wall Street investors and strategists are saying:
Glen Capelo, who spent more than three decades on Wall Street bond trading desks and is now a managing director at Mischler Financial Group.
“Scott is a fiscal hawk and will certainly be positive overall for the economy and markets.”
“He wants to limit spending. Bessent wants to put the Treasury Secretary back in line with the markets.” The bottom line of Bessent’s tariff policy is that companies can have a certain amount of time to ensure they are fueling the U.S. economy or risk having to pay tariffs, Capelo said.
“It’s not the philosophy of tariffs falling on our heads that many are talking about. So I think it’s going to be great for America.
John Fagan, Director at Markets Policy Partners
Fagan, who led the U.S. Treasury’s markets monitoring group from 2014 to 2018, said Bessent’s past comments and opinions could change once he faces the reality of the role as Treasury secretary. “When people are in the markets, their comments about the markets are indelibly colored by what their book is.”
However, « when decisions are made about issuing Treasury, these are extremely high-consequence decisions that are made with large groups of people around the table and enormous amounts of data and considerations that actually arise from the stable and predictable.
Priya Misra, portfolio manager at JPMorgan Asset Management
“While the Treasury Secretary ultimately implements the Administration’s fiscal policy, I am encouraged that the person in charge is very knowledgeable about the markets.”
“Bessent spoke of a gradual approach to tariffs and stressed the need to control the deficit. This suggests that Bessent wants to avoid a market reaction that would limit the administration’s trade and fiscal policy goals.”
