Speaker 1: Bloomberg Audio Studios, podcasts, radio news. The Hedgehound manager Scott
Speaker 1: Bessont is President elect Donald Trump's pick to be the
Speaker 1: next Secretary of the Treasury, and he finally got the
Speaker 1: nod after a very public and kind of messy competition.
Speaker 2: It was a knife fight for a very stressful job.
Speaker 1: Bloomberg Sileia Mosen covered that contest as it played out
Speaker 1: on television, on obed pages and at mar A Lago,
Speaker 1: where Trump has been preparing for his second term, and
Speaker 1: it dragged on for weeks.
Speaker 2: Scott Bessant looked like he was tipped to get the
Speaker 2: job easy pas and then he left town. He left
Speaker 2: Palm Beach, and Howard Lutnick, the co chair of Trump's
Speaker 2: transition efforts and CEO of Canter Fitzgerald.
Speaker 1: He moved in, and Seleia says he.
Speaker 2: Had Lutnick out there talking and having his allies come
Speaker 2: in for him and against Bessett, and then you had
Speaker 2: Beston doing the same thing.
Speaker 1: That strategy backfired. Seleia says it made the President elect
Speaker 1: so irritated that he brought in more candidates, including Kevin Walsh,
Speaker 1: a former Federal Reserve governor, and Mark Rowan, the CEO
Speaker 1: of Apollo Global Management. In the end, Trump nominated Lutnick
Speaker 1: to run the Commerce Department. Worsh reportedly said he's more
Speaker 1: interested in the job of FED chair when that opens up.
Speaker 1: So Bessent got Treasury. What was it that sort of
Speaker 1: tipped things in his favor at the end? How did
Speaker 1: he win?
Speaker 2: It might have been that no one really other than
Speaker 2: bessn't really wowed Trump.
Speaker 1: Trump has picked someone who knows Wall Street and that
Speaker 1: seems to have impressed Wall Street. Stocks rose and the
Speaker 1: dollar weakened after the President elect announced his decision. I'm
Speaker 1: David Gura, and this is the Big Take DC from
Speaker 1: Bloomberg News Today. On the show, I'm joined by my
Speaker 1: co host Seliah Mosen to talk through who is Scott
Speaker 1: Bessant and if he's confirmed by the US Senate, how
Speaker 1: will he approach the job and advance his boss's Economica Jet.
Speaker 1: So President elect Trump made this announcement after the market
Speaker 1: closed on a Friday. I think I got the email
Speaker 1: at six fifty five Eastern time. As you and our
Speaker 1: colleagues have talked to investors, what are they telling you
Speaker 1: about the president Elex Pick?
Speaker 2: Markets seem happy they see Bessant as bringing stability, which
Speaker 2: is something that we had in Trump one point zero.
Speaker 2: You know, as much turnover as you saw in Trump's cabinet.
Speaker 2: Steve Emnution's state as treasure secretary for all four years,
Speaker 2: and he was able to leverage relationships because people knew
Speaker 2: this man is going to stay and he understands the
Speaker 2: plumbing of the global financial system. You know, that's something
Speaker 2: that markets really want. They want stability, and if Bessont
Speaker 2: can somehow manage to provide that, I think he'll end
Speaker 2: up being a successful treasure secretary.
Speaker 1: What kind of career has Scott Bessont had up to
Speaker 1: this point. What's his background?
Speaker 2: Yeah, so he worked for George Soros. He was involved
Speaker 2: in the investor bet that broke the pound in the
Speaker 2: early nineties, and so he comes with a keen interest
Speaker 2: in current policy and you could tell he talks about
Speaker 2: that a lot, and Donald Trump talks about dollar policy
Speaker 2: a lot. He also set up and ran his own
Speaker 2: hedge fund since about twenty fifteen or sixteen, I think
Speaker 2: he has been overseeing that and it was about a
Speaker 2: year or a little over a year ago that he
Speaker 2: re entered Trump's orbit and started looking at Trump's policies
Speaker 2: and saw that Trump's stock was going to go up,
Speaker 2: and he was right.
Speaker 1: You said, re entered Trump's orbit. When did they meet?
Speaker 2: So Bessen told me that he has known the Trump
Speaker 2: family for like thirty years, and I think he knew
Speaker 2: Trump's brother and so he said, oh, well, Donald Trump
Speaker 2: probably knew my face but didn't quite know exactly who
Speaker 2: I was. But he was close to Donald Trump Junior.
Speaker 2: That was sort of his door into Trump world about
Speaker 2: a year ago, and that's how he got a first
Speaker 2: meeting with Donald Trump.
Speaker 1: What do your sources say about how the work that
Speaker 1: he's done so working with these big hedge funds is
Speaker 1: likely to shape his perspective on this job, And maybe
Speaker 1: would just be useful for you to describe all that
Speaker 1: a Treasury secretary has to do. It's a huge remit.
Speaker 2: Yeah, it's huge. People like to call the Treasure secretary
Speaker 2: the chief financial officer of the United States, but that
Speaker 2: actually only refers to one third of the job. A
Speaker 2: charge secretary oversees debt issuance, and that's somewhere we could
Speaker 2: see from a Treasury secretary, Scott Vesant, a little bit
Speaker 2: of creativity maybe in how our massive deficit is issued
Speaker 2: and how that's structured and sort of the tenor of
Speaker 2: notes and things. He's also going to be involved in
Speaker 2: tax policy and financial stability, international economic diplomacy, so being
Speaker 2: the representative for that at G seven and G twenty meetings,
Speaker 2: and then the other big component is national security and
Speaker 2: foreign policy by way of economic sanctions.
Speaker 1: As you talk to investors about him, do any of
Speaker 1: them express any reservations about him not having experience in Washington,
Speaker 1: not being a creature of DC, not being someone like
Speaker 1: Janet Yellen, for instance, who spent the book of her
Speaker 1: career in Washington in a lot of these big, high
Speaker 1: profile jobs, doing quite a bit of manager.
Speaker 2: So there's always a steeplering curve for a Treasure secretary,
Speaker 2: particularly when it comes to dealings with Congress. The example
Speaker 2: that comes up frequently, a more recent kind of screw
Speaker 2: up there or confusion or misreading of the room is
Speaker 2: Stephen Mnusian. I think it was twenty seventeen. He had
Speaker 2: to raise the debt ceiling, and he went into a
Speaker 2: room full of Republican lawmakers and it was a private conference,
Speaker 2: and said, just raise the debt ceiling for me, and
Speaker 2: they burst out of that room telling every reporter that
Speaker 2: this is what he said for me. We're not going
Speaker 2: to do it for you. We served the American people,
Speaker 2: not you, and it was such a blunder, you know.
Speaker 2: Stephn Mnustion came in. He didn't know any lawmakers very
Speaker 2: closely or how all this stuff really worked from a
Speaker 2: Washington perspective. Did not have experience in the public sector.
Speaker 2: Tim Geitner knew. He came from the Federal Reserve. He'd
Speaker 2: been at Treasury as a civil servant in the nineties.
Speaker 2: Hank Pulson had no experience on that front. You know,
Speaker 2: you would hope people like that they come in without
Speaker 2: hubris of knowing what you don't know and then relying
Speaker 2: on people to help you navigate, and also just understanding
Speaker 2: that you come from a world where it's about relationships
Speaker 2: and deal making and just learning on the fly. Bessant
Speaker 2: comes from Wall Street, but he doesn't have the same
Speaker 2: experience of some of the big heavyweights that we've seen
Speaker 2: as Treasury Secretary, So Bob Rubin, Hank Paulson, Stephen Mnushan,
Speaker 2: they loomed large because of their Goldman experience. Paulson, he
Speaker 2: was CEO, and he said that something about the way
Speaker 2: at Goldman you learn about serving the client, not serving
Speaker 2: your own ego, really prepared him to work in government
Speaker 2: where his biggest client was the president. So Besson't doesn't
Speaker 2: come from that sort of traditional part of Wall Street.
Speaker 1: After the break, what we know about how aligned Bessont
Speaker 1: is with Tromp and what that could tell us about
Speaker 1: how Besont may approach the role of Treasury Secretary. Scott Besson,
Speaker 1: president elect Donald Trump's nominee to be the next Treasury Secretary,
Speaker 1: helped Trump hone his messaging about the economy on the
Speaker 1: campaign trail, and when Trump announced he'd picked Besson to
Speaker 1: lead Treasury, he said, he will quote support my policies
Speaker 1: that will drive US competitiveness and stop unfair trade imbalances,
Speaker 1: work to create an economy that places growth at the forefront,
Speaker 1: especially through our coming World Energy dominance. How much uncertainty
Speaker 1: ether Seleia about where Scott Besson stands on the President
Speaker 1: of Elect's biggest economic priorities.
Speaker 2: We know quite a bit, David, because Beston was kind
Speaker 2: of openly auditioning for this role. He would meet with reporters,
Speaker 2: do ed boards. He's written op eds for the journal
Speaker 2: for the economists for Fox talking about different policies. I
Speaker 2: think it was Friday, November fifteenth, Bessant wrote an op
Speaker 2: ed talking about how supportive he is of tariffs as
Speaker 2: a tool of foreign policy, trade policy, national security, and
Speaker 2: so markets now are digging into those comments things that
Speaker 2: he's said. They kind of see someone with a Wall
Speaker 2: Street pedigree like Bessint as someone who might be a
Speaker 2: bit of a hindrance to Trump's more protectionists or populist tendencies.
Speaker 2: But that's the open question to me is how much, say,
Speaker 2: will Scott Besson as treasure Secretary have over tariffs. If
Speaker 2: you have Howard Lutnik over at Commerce, who's also overseeing USTR,
Speaker 2: the US Trade Representative's office, to focus on tariffs in trade,
Speaker 2: I think markets should kind of keep an eye on
Speaker 2: how much sway Bessant really has with tariffs.
Speaker 1: We had this knife fight play out in the run
Speaker 1: up to these nominations of Howard Lutnik and Scott Besson.
Speaker 1: Are people confident that the fight ends there, that when
Speaker 1: that moves into the cabinet room, we're not going to
Speaker 1: see the same kind of fighting.
Speaker 2: No, people are not confident in that at all. In
Speaker 2: the first administration. We saw these kinds of knife fights
Speaker 2: play out and cabinet officers leaking to the press or
Speaker 2: going on Fox News to make their case for the
Speaker 2: policy that they want implemented over someone else, and it.
Speaker 3: Doesn't always bode well. Lutnik has secured a pretty big job.
Speaker 3: He has Commerce Secretary. He's also overseeing USTR and that's
Speaker 3: a new idea. Trump decided to put that under lutnix purview.
Speaker 3: So the two men do not get along. That's why
Speaker 3: it didn't turn out where one is any c director
Speaker 3: and one's Treasury Secretary, because Trump and the team realize
Speaker 3: these two men can't work together.
Speaker 1: Scott Beson said in an interview over the weekend, his
Speaker 1: top priority is going to be taxes. Is he going
Speaker 1: beyond just pushing for the continuation of the so called
Speaker 1: Trump tax cuts? Is it bigger than that? Oh?
Speaker 4: Yeah.
Speaker 2: I have so many questions on how tax policy is
Speaker 2: going to unfold, because you know, the first hundred day
Speaker 2: plan is a huge thing that we're going to be
Speaker 2: watching for as we see officials rolled out and policy
Speaker 2: plans rolled out and signals. Given Trump's twenty seventeen tax cuts,
Speaker 2: some of those tax cut expire at the end of
Speaker 2: twenty twenty five. Republicans own Congress both chambers in their hands,
Speaker 2: so let's see how far they can get. But I
Speaker 2: don't know that Bessett has said anything grave detail about
Speaker 2: where that would go. We know publicly Donald Trump has
Speaker 2: talked about a lot of different kinds of tax cuts.
Speaker 1: Bessant is someone who has not shied away from talking
Speaker 1: about the deficit. He talked about it during an interview
Speaker 1: on Bloomberg Television back in October.
Speaker 4: I am very concerned about what is happening right now.
Speaker 4: We have never had a budget deficit like this. We
Speaker 4: are at seven percent of GDP in terms of the deficit.
Speaker 4: We've never had this when it's not a recession, not
Speaker 4: a war. And what do we have to show for it?
Speaker 1: How does he plan to reduce the size of the deficit.
Speaker 2: Yeah, I love deficit talk because everyone comes up with
Speaker 2: these great ideas of how to reduce the deficit. But
Speaker 2: Congress needs to do that right A charge secretary can
Speaker 2: lead the charge. Congress is the keeper of the purse
Speaker 2: when it comes to spending in taxes. Anytime an administration
Speaker 2: where government has accomplished that, it is because Wall Street
Speaker 2: or investors or markets have thrown a tantrum that you
Speaker 2: have too much deficit. And I don't see how a
Speaker 2: Trump administration or Congress makes the very difficult trade offs
Speaker 2: and cuts in spending that will be unpopular with voters
Speaker 2: unless they can blame it on markets or blame it
Speaker 2: on someone else.
Speaker 1: Scott Beson's going to play a role in picking the
Speaker 1: next chair of the Federals or of advising the president
Speaker 1: elect on that, Yeah.
Speaker 2: Let's talk about the Fed. Donald Trump thinks that presidents
Speaker 2: should have a say on interest rates. We don't know
Speaker 2: what that really means, and so I don't know. Maybe
Speaker 2: this is some kind of creative thinking on Beson's part
Speaker 2: to say, Okay, look, he really wants to fire the Powell,
Speaker 2: or he really wants to set monetary policy.
Speaker 4: Or have a say.
Speaker 2: Maybe the way to do it where we're not just
Speaker 2: causing a constitutional and markets crisis by sacking the Federal
Speaker 2: Reserve chair. We do it by creating this shadow FED
Speaker 2: chair situation where you nominate or announce the name of
Speaker 2: who you will pick sent to to the Senenate for
Speaker 2: confirmation to be the next Federal Reserve chair, and that
Speaker 2: person is providing forward guidance on what they would do,
Speaker 2: so markets start to look to that person's comments over
Speaker 2: the sitting Federal Reserve chair. But this is my number
Speaker 2: one question to Scott Beson right now is like, how
Speaker 2: would that play out? And how seriously should we take
Speaker 2: this plan effectively.
Speaker 1: Like a fed chair and waiting. Yeah, you covered the
Speaker 1: Treasury Department when Steve Mnuchin was running it, and he
Speaker 1: was there, as you said, for all four years of
Speaker 1: Donald Trump's first term. If Scott Best is confirmed, what
Speaker 1: is going to determine how successful he is at the
Speaker 1: job with Trump?
Speaker 2: It's always maintaining Trump's trust and always making sure you're
Speaker 2: aware of who he's meeting with, and trying to be
Speaker 2: the last person in the room. As Best learned when
Speaker 2: he left Palm Beach and thought that he had bagged
Speaker 2: the job of Treasure secretary and then it kind of
Speaker 2: blew up. Mnusian learned that Steven Mnushan learned that if
Speaker 2: you leave the president with Peter Navarro, then the trade
Speaker 2: advisor and like a known China hawk in the room
Speaker 2: with President two long, Trump is going to start asking
Speaker 2: questions like can we aggressively intervene in the US dollar
Speaker 2: to make it weaker and can we do X, Y
Speaker 2: and Z that might really blow up foreign relations or
Speaker 2: economic relations with other countries. So I think Scott has
Speaker 2: some have to learn sort of to make sure that
Speaker 2: you stay in the good graces of the president, stay visible,
Speaker 2: and are keeping tabs and keeping treasury related policies firmly
Speaker 2: in the hands of the Treasure Department and not let
Speaker 2: others encroach on that remit.
Speaker 1: Thanks for listening to The Big Take DC podcast from
Speaker 1: Bloomberg News. I'm David Gura. This episode was produced by
Speaker 1: Julia Press. It was mixed by Alex Secura and fact
Speaker 1: checked by Adriana Tapia. It was edited by Caitlin Kenny
Speaker 1: and Sarah Halzac. Elizabeth Ponso and Wendy Benjaminson provide editorial direction.
Speaker 1: Naomi Shaven is our senior producer. Nicole Beamster Bor is
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