Scott Bessent ‘is a financial hawk’: Wall Street reacts to Treasury pick

The $28 trillion U.S. Treasury market closed for the week as Bessent, who runs macro hedge fund Key Square Group, was officially nominated by President-elect Donald Trump. Until trading resumes early Monday in Asia, investors and strategists are awaiting more details on Bessent’s views on fiscal policy and next steps. according to him.

Here’s what Wall Street investors and strategists are saying:

“Scott is a financial hawk and he certainly will bring an overall positive impact to the economy and market.”

“He wants to limit spending. Bessent wants to bring the Chancellor of the Exchequer back into line with the markets.” The main point of tariff policy under Bessent, Capelo said, is that companies can have a certain amount of time to make sure they are boosting the U.S. economy, or else face tariffs. “It’s not the inflationary tariff philosophy that many people talk about. So I think that will be very good for America.”

John Fagan, principal at Market Policy Partners: Fagan, who ran the U.S. Treasury’s market surveillance team from 2014 to 2018, said Bessent’s previous comments and views should change as he faces the realities of his role as Finance Minister. “When people enter the market, their commentary on the market will be indelibly influenced by the content of their book.” However, “when decisions are made about Treasury issuance, they are extremely consequential decisions made with large groups of people around the table and enormous amounts of data and consideration.” Real giants come from stability and predictability.”

Priya Misra, portfolio manager at JPMorgan Asset Management: “While the Treasury Secretary ultimately executes the administration’s fiscal policy, I am encouraged that the person in charge is very familiar with the markets ”.

“Bessent has talked about a phased approach to tariffs and has been vocal about the need to control the deficit. It suggests that Bessent wants to prevent a market reaction that could limit the administration’s goals on trade and fiscal policy.”

“One area where there may be some concern is his comments about the ‘Shadow Fed Chairman’ but I think he knows that an independent central bank is the main reason why the US dollar is into a reserve currency and the US Treasury as a safe haven currency. heaven. I do think the administration can comment on monetary policy, but the Fed will remain focused on its dual mandate.”

Zachary Griffiths, head of US macro strategy and investments at CreditSights: “Having a macro hedge fund seems to be a good thing for the markets – someone who understands how that side works is good ”.

“To me, his views regarding the Fed – somehow creating a lame duck Chairman Powell – are a bit concerning. I know Bessent has withdrawn the recommendation he made. But that was the only thing that caught my attention.” That risk “causes that potential volatility event to continue if they take a more unorthodox approach in their relationship with the Fed.”

“He’s been Trump’s economic adviser for a long time and I think he understands Trump,” said Andrew Brenner, head of international fixed income at NatAlliance Securities.

“Under Bessent at the Treasury and with Trump, I don’t think they would 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 independence agenda.”

“The Finance Minister will have three immediate tasks. First, let’s shape the scale and scope of the fiscal response in the next recession. Second, determine the term structure of Treasury debt as borrowing increases over the next year. Three, potentially have a say in tax policy negotiations next year.”

“The process was long and thoughtful,” said Gregory Faranello, head of U.S. rates trading and strategy at AmeriVet Securities. Bessent is a great choice. He understands the global market, which is important for this role. And the market has faith in him.”