Treasury Secretary Scott Bessent, who fits the stereotype of a successful hedge fund manager, has rapidly emerged as one of the administration’s most vocal supporters of policies that are reshaping international commerce and causing turbulence in financial markets.
The intentional, technical Wall Street seasoned professional who previously advocated for the phased introduction of fresh trade restrictions has now become an outspoken supporter of President Donald Trump’s updated MAGA agenda. This shift highlights that immediate market responses take a back seat to key administration goals like extensive tariff measures.
When financial markets experienced their steepest decline in many years this week, Bessent appeared on TV earlier this month advocating for the U.S. to "wean" itself from excessive government expenditure. His remarks at a recent event drew attention when he stated that “having access to inexpensive products does not define the American Dream.” Additionally, he expressed minimal worry over the immediate economic effects of imposing tariffs.
When asked about a recent downturn in the markets where the S&P 500 fell over 10 percent below its latest high point, he stated that "corrective moves are normal."
“What’s unhealthy is having exuberant market conditions,” he stated while appearing on NBC's "Meet the Press" on Sunday. “That’s when financial crises tend to occur.” He continued, “I’m not concerned about the stock market itself. In the long run, implementing sound tax policies, reducing regulations, and ensuring energy security will lead to strong market performance.”
This did not align with what numerous people on Wall Street anticipated.
He most certainly hasn’t delivered the performance that the market anticipated up until now," stated Sarah Bianchi, a senior managing director at the investment banking advisory firm Evercore ISI. "It’s always challenging for anybody to determine when and how they should approach the President with the message that significant changes are necessary—this is especially true in what we might call 'Trump 2.0'.
Bessent’s subdued assurances to the financial markets indicate that there might not be anyone within the administration ready to oppose Trump’s strengthened push for overhauling U.S. economic policies. Fluctuations in the stock market, coupled with guidance from traditional economic policymakers such as Steve Mnuchin, who served as Trump’s initial Secretary of the Treasury, previously assisted in moderating the president’s protectionist and possibly disastrous agendas during his time in office.
"Now, 'the safeguards that were present during the initial administration no longer exist,'” stated a former Trump administration official, requesting confidentiality to allow for honest discourse.
The early positive response from Wall Street to Bessent, a protegé of George Soros with limited experience in Republican politics prior to aligning himself with Trump, might have underestimated his zeal for supporting the president's policies.
Jens Nordvig, the founder of Exante Data and someone who has been acquainted with Bessent for over ten years, mentioned that the Treasury Secretary holds a strong fascination with geopolitical matters, specifically focusing on limiting China’s influence.
Bessent isn't as protective as his superior — "I believe he understands that significantly increasing tariffs comes with substantial economic drawbacks," Nordvig stated — however, this doesn't automatically mean he would oppose duties to the extent that Mnuchin did during his term.
The initial priorities of the administration have been marked by significant declarations impacting trade relations with China, Canada, and Mexico—primarily steered by the White House, Commerce Secretary Howard Lutnick, and U.S. Trade Representative Jamieson Greer. There exists an acknowledged but unspoken competition between Bessent and Lutnick; both vied for Trump’s endorsement to head the Treasury Department. According to someone privy to the interactions surrounding Bessent—who wished to remain anonymous—the Treasury secretary has found themselves treading cautiously amid pressure from President Trump, White House trade advisor Peter Navarro, and Lutnick regarding the imposition of tariffs.
He needs to be cautious not to become a Debbie Downer," the individual remarked, likening the interaction between Bessent and Lutnick to "a Brazilian knife fight in the dark.
A representative from the Treasury stated that the secretary fully supports President Trump's plan to rejuvenate the economy and make daily living costs lower for Americans across various demographics.
"He is relentlessly dedicated to implementing this directive on behalf of the President, ensuring that both Main Street and Wall Street benefit from President Trump’s successful economic plan," stated the spokesperson.
Bessent has recently admitted that "a natural shift will occur as we transition from relying on government expenditure to depending more on individual spending."
The lowest 50 percent of working Americans have been significantly impacted. We are addressing this issue," he stated while appearing on CNBC. "Is it possible that the economy we took over is beginning to stabilize? Certainly.
Bessent’s overarching statement—that significant long-term economic benefits require accepting certain short-term difficulties—has remained unchanged, even though Wall Street was seeking some comfort.
It’s evident to everyone that this person isn’t merely echoing market sentiments," stated Josh Lipsky, Senior Director at the Atlantic Council's GeoEconomics Center. He further explained that Secretary Bessent’s recent statements suggest "a belief that numerous aspects of the current system are flawed. Consequently, proposed policies may appear drastic but aim to rectify these perceived issues within an allegedly dysfunctional framework.
Although many economists remain optimistic about economic expansion this year, indicators suggest that the new administration’s aggressive policies might impede growth. Economists from major banks indicate a higher probability of stagflation—or potentially even a recession—while business leaders surveyed by the Business Roundtable have scaled back their projections for upcoming hiring and investments. During an interview on Fox Business on Wednesday, Goldman Sachs CEO David Solomon noted that policy ambiguity is hindering mergers and acquisitions, causing investors to adopt a wait-and-see approach.
Bessent has highlighted a recent drop in long-term lending rates associated with 10-year Treasury notes and decreased petrol prices as indicators that Trump’s plans have been advantageous for the American economy. However, he has also mentioned that the fresh set of administrative measures will pivot the economic focus away from public expenditure, suggesting there could be an adaptation phase ahead.
There is no question that Trump has significantly influenced his perspective on the economy," stated Stephen Moore, a previous advisor to Trump and currently a senior visiting fellow at the Heritage Foundation. He also mentioned being struck by Bessent’s skillful knack for sidestepping potential pitfalls during media engagements that might provoke Trump. Regarding policy, "his approach now aligns more closely with Trump’s view of their effects on blue-collar, middle-class Americans.
Victoria Guida and Declan Harty were contributors to this report.
