Speaker 1: Bloomberg Audio Studios, podcasts, radio News. It's been just over
Speaker 1: a week since Donald Trump was reelected, and he hasn't
Speaker 1: wasted any time putting together his cabinet. Trump is expected
Speaker 1: to name Rubio as Secretary of Stadium Matt Gates nominated
Speaker 1: by President like Donald Trump as his attorney General. Representative
Speaker 1: Mike Woltz is in line to be National Security Advised.
Speaker 1: One of the Bloomberg reporters tracking who Trump is picking
Speaker 1: for his cabinet is our very own Seleia Mosen.
Speaker 2: During the first Trump term, I covered the Treasure Department,
Speaker 2: so that's Steven Mnushan for all four years.
Speaker 1: Seleia is keeping her eyes on Treasury this time around
Speaker 1: because the person Trump nominates for that job would play
Speaker 1: a major role in shaping economic policy, and we are
Speaker 1: still waiting for Trump to tell us who he's picked.
Speaker 2: We've seen a slew of announcements come through for posts
Speaker 2: all the way down to who is going to be
Speaker 2: the ambassador to Israel, but we have not heard some
Speaker 2: of the key economic policy picks that are going to
Speaker 2: make a very big difference to Bloomberg readers, to traders,
Speaker 2: but also just to the average American. And their costs
Speaker 2: of living.
Speaker 1: This is the Big Take DC podcast from Bloomberg News.
Speaker 1: I'm David Gura. Today on the show Seleia and I
Speaker 1: look at who Donald Trump has tapped to lead his
Speaker 1: new administration and what those picks tell us about his
Speaker 1: priorities Slay. It seems like this cabinet is coming together
Speaker 1: pretty quickly? Am I right in my perception of that?
Speaker 1: Are we getting these names, these nominations and appointments pretty fast?
Speaker 2: They are coming quickly. They're coming in an order that
Speaker 2: we didn't really expect. Usually we see the White House
Speaker 2: Chief of Staff come out first, which it did happen
Speaker 2: this time. Susie Wilds was announced pretty quickly, but then
Speaker 2: we're used to seeing Secretary of State and Treasury Secretary
Speaker 2: announced very quickly after that.
Speaker 1: How different is the way this is playing out from
Speaker 1: what we saw last time when he was elected back
Speaker 1: in twenty sixteen.
Speaker 2: It's actually much more organized this time. Susie Wiles, who
Speaker 2: was Trump's campaign manager and was credited for running a
Speaker 2: very stable and almost leak free campaign, has become Chief
Speaker 2: of staff for the White House and so now she
Speaker 2: is running point on transition announcements and how Trump can
Speaker 2: come to his decisions, as are having interviews and people
Speaker 2: are coming through mar A Lago to talk about different priorities.
Speaker 2: Where you're seeing things come out a little bit more methodically.
Speaker 1: You mentioned mar A Lago, the President's Club in South Florida.
Speaker 1: What is the scene there like.
Speaker 2: It's a revolving door of people. Howard Lutnik, who is
Speaker 2: in the running for treasure secretary, has been there for
Speaker 2: more than a week now. Scott Bessant, who was also
Speaker 2: in the running for treasure secretary, was down there recently.
Speaker 2: We have Susie Wiles down there. Bob Leidheiser, who was
Speaker 2: Trump's US trade representative during the first administration and now
Speaker 2: is under consideration for a top you can policy job,
Speaker 2: including Treasure secretary. He is also down there.
Speaker 1: You mentioned a minute ago, Susie Wiles, who was his
Speaker 1: campaign co manager, Howard Lutnick, who's running this transition team.
Speaker 1: To what degree are they influencing this process?
Speaker 2: That's a really interesting question. With Donald Trump, he makes
Speaker 2: his own decisions. He likes to see a bit of
Speaker 2: tension in the room. He likes to see different ideas
Speaker 2: coming forth and see how his different advisors react to
Speaker 2: different ideas. Trump is known to float names, get them
Speaker 2: out into the media to see who it would be happy,
Speaker 2: who would not be happy. I will say, when it
Speaker 2: comes to the economic policy positions that we're watching the
Speaker 2: most closely here at Bloomberg, especially treasure secretary, we expect
Speaker 2: him to use his first term playbook and look for
Speaker 2: a secretary with Wall Street chops.
Speaker 1: How much has that mattered to the President elect throughout
Speaker 1: this process, having the backing of traditional Wall Street As
Speaker 1: he makes this pick.
Speaker 2: It does sound like Trump someone with Wall Street pedigree
Speaker 2: for the job, and most of the people that he's
Speaker 2: looking at do have that in common. His first treasure secretary,
Speaker 2: Steven Menusan, he lasted all four years, which was rare
Speaker 2: in the first term for any cabinet officer to weather
Speaker 2: all those storms that we saw from twenty seventeen to
Speaker 2: twenty twenty one. And I think Trump did realize that
Speaker 2: having stability in economic policy, making a treasure secretary who
Speaker 2: can withstand the pressures of not just government but also
Speaker 2: the unique features of serving under Trump, who has a
Speaker 2: very different governing style, shooting from the hip. A lot
Speaker 2: of policies made over social media. Sometimes it's like the
Speaker 2: last advisor in the room is the one whose argument
Speaker 2: kind of wins out those kinds of things. If it's
Speaker 2: someone who can last through that and give markets and
Speaker 2: Congress and international economic allies that kind of stability, I
Speaker 2: think he is finding that that's a benefit. But at
Speaker 2: the same time, there is a little bit of regret
Speaker 2: that maybe Steven Mnushan was lukewarm on tariffs and served
Speaker 2: as a bulwark to some of Trump's more surprising protectionist
Speaker 2: economic proposals, and so this time he's coming back into
Speaker 2: government not just on economic proposals but all across the board,
Speaker 2: knowing that I want to make sure that the people
Speaker 2: that I have on my cabinet who are implementing the
Speaker 2: policies that I've been talking about for years now are
Speaker 2: people who really do align with that vision and aren't
Speaker 2: going to try to stop anything from happening.
Speaker 1: I wonder if there is an overarching theme to the
Speaker 1: personnel choices that he's made so far. So we don't
Speaker 1: have a full cabinet yet, but when you look at
Speaker 1: who he has put forward, what ties them together?
Speaker 2: I would say fealty Trump learned in the first term
Speaker 2: after having so much turnover and key jobs, especially in
Speaker 2: the White House chief of staff role, especially in the
Speaker 2: national security and foreign policy realm, and some of the
Speaker 2: economic posts, not Treasure secretary, but you know, white House
Speaker 2: National Economic Council director. Those jobs turned over so much.
Speaker 2: People were fired via tweet, people left, they quit, they
Speaker 2: were edged out or knifed out by each other. And
Speaker 2: this time we are seeing that in fighting that was
Speaker 2: a key feature of Trump one may not be a
Speaker 2: feature in Trump two. It seems that he has less
Speaker 2: tolerance for that kind of behavior.
Speaker 1: Coming up, we run through who Donald Trump is considering
Speaker 1: to be his next Treasury secretary and what the different
Speaker 1: candidates for the job could bring to the department. As
Speaker 1: Donald Trump has put together his cabinet and picked senior
Speaker 1: officials for his next term, there have been some surprises,
Speaker 1: and of course that could happen again with his pick
Speaker 1: for Treasury secretary. But Bloomberg Siliah Mosen says there are
Speaker 1: four men who are considered front runners for the job.
Speaker 1: Let's dig into that a little bit more. This is
Speaker 1: your Bailey Wick. The position of Treasury Secretary, of course,
Speaker 1: is a key job on or any administration. How important
Speaker 1: is it to President Electrump?
Speaker 2: Oh? Incredibly important. He has a huge economic agenda ahead
Speaker 2: of him. He is ringing forth protectionism, which is something
Speaker 2: that our allies and adversaries around the world are nervously watching.
Speaker 2: What kind of economic agenda does that mean if the
Speaker 2: US is even more isolationist going forward. So he has
Speaker 2: talked about ten percent tariffs across the board for pretty
Speaker 2: much everyone, and a special sixty percent tariff rate maybe
Speaker 2: for China. He's also talked about the dollar. It needs
Speaker 2: to stay the world's reserve asset, but maybe it's also
Speaker 2: too strong. And he's also talked about the Federal Reserve,
Speaker 2: how a president should have a say in interest rates
Speaker 2: and how the Fed manages the rate path, and which
Speaker 2: economic policy advisors he chooses, whether it's enough people with
Speaker 2: markets know how and who understand the plumbing of the
Speaker 2: global financial system and can tell Trump what would market
Speaker 2: react to in a positive way versus a negative way,
Speaker 2: what could really wreak havoc in financial markets which would
Speaker 2: cause Trump a lot of headaches. And also he doesn't
Speaker 2: like that He likes to see market positive economic policies
Speaker 2: going forth. Those are a couple of the things that
Speaker 2: are at stake, and a lot of it comes down
Speaker 2: to personnel.
Speaker 1: Let's start with Scott Besson hedge fund manager, somebody who
Speaker 1: has been speaking out on behalf of the campaign, now
Speaker 1: pretty vocal during the transition. What does he bring to
Speaker 1: the table?
Speaker 2: So, Scott Bessant came into Trump's orbit only in the
Speaker 2: past year to fifteen months. He has slowly won the
Speaker 2: support of MAGA Republicans who are very close to Trump.
Speaker 2: He has been out in the public on Bloomberg TV,
Speaker 2: on other networks, writing op eds for different outlets, and
Speaker 2: visiting journalists in their offices around Washington, boosting all of
Speaker 2: Trump's economic policy proposals, which include tariffs, which include maybe
Speaker 2: encroaching on the federal reserve a little bit. He's talked
Speaker 2: about US China policy, He's talked about the dollar, He's
Speaker 2: talked about financial regulation, all of the things that Trump
Speaker 2: holds up as key pillars to his economic agenda. But
Speaker 2: he's also emerged as a key advisor to Trump. Trump
Speaker 2: has talked about Scott Bessett a lot in his rallies, saying,
Speaker 2: you know, there's a great guy right there, Scott is
Speaker 2: fantastic and Vasson also helped Trump write some of his
Speaker 2: key economic policy speeches in the last few months, particularly
Speaker 2: one at the Economics Club of New York, which came
Speaker 2: with a lot of fresh news on what kind of
Speaker 2: agenda Trump would have going forward.
Speaker 1: I know of him as a macro investor. What's his
Speaker 1: reputation on Wall Street.
Speaker 2: He's known as someone who really understands global capital markets.
Speaker 2: He's known as someone who is actively traded in markets
Speaker 2: and can speak publicly about economic policy. He is a
Speaker 2: little bit unknown in Washington, which is not unusual for
Speaker 2: a Treasure secretary should he get the job. He has
Speaker 2: not had a government job before, and so there is
Speaker 2: some questions emerging about whether he is cut out to
Speaker 2: deal with sort of the political thickets of Congress, having
Speaker 2: to work with lawmakers in the House and the Senate
Speaker 2: in both parties to do things like raise the debt ceiling,
Speaker 2: you know, renew some of the tax cuts that are
Speaker 2: going to expire next year. But he is known as
Speaker 2: someone who markets see as their own person, which is
Speaker 2: quite important for a treasure secretary because there are moments
Speaker 2: during any kind of economic or financial crisis, large or small,
Speaker 2: no matter where it's going on around the world, where
Speaker 2: a treasure secretary has to lean on their personal credibility,
Speaker 2: their personal gravita in order to calm markets and serve
Speaker 2: as an emollient.
Speaker 1: Tell us if you would about Howard Lutnik.
Speaker 2: He has emerged this year as a really close advisor,
Speaker 2: and like Bessett, he has raised millions of dollars for
Speaker 2: the Trump campaign. He's also been a donor giving money
Speaker 2: to Trump and also served as a bit of a surrogate,
Speaker 2: but also hitting the airwaves, going out there boosting proposals,
Speaker 2: touting policies, and then he became the co chair of
Speaker 2: Trump's transition efforts. But he might be playing a little
Speaker 2: bit of a you know, the Dick Cheney playbook, where
Speaker 2: he has decided, I'm running transition efforts, and I'm also
Speaker 2: going to see if i can get a job that
Speaker 2: I want by putting my name in the ring. And
Speaker 2: you know, the latest reporting from Bloomberg is that that's
Speaker 2: something that is chafing Trump allies and key advisors. They
Speaker 2: don't love that Lutnik is somewhat aggressively jockeying for a job,
Speaker 2: specifically treasure secretary.
Speaker 1: We saw someone else who is reported to be in
Speaker 1: the running, John Paulson, drop out of the race to
Speaker 1: be Treasury secretary, citing the fact that his personal finance
Speaker 1: is just too complicated. Is that a factor that's affecting
Speaker 1: others that we're talking about.
Speaker 2: Here, Yeah, just like last time, that is a bit
Speaker 2: of a pattern that these are very rich men who
Speaker 2: are looking to come into the administration. There are ways
Speaker 2: around that. If you are willing to give up the
Speaker 2: idea of being a cabinet secretary, you can come in
Speaker 2: as a special government employee, which is something that Elon
Speaker 2: Musk is doing. Who's going to be heading up apparently
Speaker 2: government efficiency, a newly created department, and so that means
Speaker 2: you don't have to divest. But Treasury is unique. If
Speaker 2: you are a treasure secretary, you have a hand in
Speaker 2: public financing, so that's the almost thirty trillion dollar market
Speaker 2: for treasuries that are out there. Also financial regulation, so
Speaker 2: that affects banking stocks. You also oversee the IRS, and
Speaker 2: you also oversee US currency policy, so the currency market
Speaker 2: gets involved there. So you have you know, these secretaries
Speaker 2: have to divest from a large amount of their investments.
Speaker 2: So the problem, the key problem for John Paulson is
Speaker 2: that he has an undisclosed and purportedly large investment in
Speaker 2: Fanny May and Freddie Mack, which are two government owned
Speaker 2: mortgage giants, and so any treasure secretary would also could
Speaker 2: have a say in the future of those two vehicles.
Speaker 2: And so we are seeing that someone like Lutnik, or
Speaker 2: someone like Elon Musk or even John Paulson, they would
Speaker 2: struggle to find a way out of all of those
Speaker 2: investments and maybe even take a loss in certain cases
Speaker 2: in order to take one of these jobs.
Speaker 1: So I guess one way you can ascertain who's in
Speaker 1: the lead here is by how often the president elect
Speaker 1: is named checking these individuals. You mentioned that he would
Speaker 1: invoke Scott Besson's name. I was covering the campaign a
Speaker 1: bit and heard him bring up Bob Litthheiser a lot.
Speaker 1: As you said, he was the president elex former US
Speaker 1: trade representative. What does he represent when you look at
Speaker 1: sort of candidates for leading treasury.
Speaker 2: Yeah, so Lightheiser is a known China hawk. He has
Speaker 2: already started creating plans for tariffs that would involve China
Speaker 2: and the European Union. So if he ends up in
Speaker 2: some kind of a position where he is not a
Speaker 2: cabinet secretary but is able to oversee just the trade
Speaker 2: policy portfolio, that means he wouldn't distracted by other parts
Speaker 2: of let's say, Treasure secretary, which would include financial stability work,
Speaker 2: debt management, economic sanctions, overseeing the Internal Revenue Service, things
Speaker 2: like that. But he does want to manage trade policy.
Speaker 2: He was pretty aggressive with tariffs the first round, and
Speaker 2: Trump really admired the work that he did.
Speaker 1: Last time. I'll ask you about is Jay Clayton, the
Speaker 1: former chair of this Curious and Exchange Commission, left that job,
Speaker 1: joined Sullivan Cromwell, a white shoe law firm here in
Speaker 1: New York.
Speaker 2: He's a little bit different than the other three candidates, right.
Speaker 2: He is not, at his core a Wall Street guy.
Speaker 2: He's worked on M and A deals, but as a lawyer,
Speaker 2: not as an investor, hedge fund manager, or trader. Now,
Speaker 2: one thing to remember is that with all of these candidates, yes,
Speaker 2: all four of these names that we've just talked about
Speaker 2: are in the running for a Treasure secretary, including Jay Clayton.
Speaker 2: But each of these people could also fit into other
Speaker 2: jobs in the Trump administration. You know, you also need
Speaker 2: a National Economic Council Director. You also need someone to
Speaker 2: run your Council of Economic Advisors. So we should just
Speaker 2: bear in mind that some of the names that we're
Speaker 2: talking about could end up in the administration, but not
Speaker 2: necessarily Treasure secretary.
Speaker 1: I wanted to ask you how soon you think we'd
Speaker 1: feel the imprint of this new Treasury secretary.
Speaker 2: Well, when it comes to markets, we're already seeing the
Speaker 2: imprint of a Trump presidency in Donald Trump himself. I
Speaker 2: think that as soon as a name is announced, we
Speaker 2: should expect even just a brief blip in markets, particularly
Speaker 2: if it is Bob Leithheiser. That is one thing that
Speaker 2: I know investors that I've spoken to in the last
Speaker 2: couple of months have said that they're really really wondering,
Speaker 2: like kind of worried is it going to be Bob Leitheiser.
Speaker 2: That's going to be a little bit more explosive for
Speaker 2: the key policies and agenda items that investors tend to
Speaker 2: be most concerned with. It just means that maybe a
Speaker 2: little bit more aggressive decoupling between US and China and
Speaker 2: more aggressive with allies in terms of tariffs and trade policy.
Speaker 2: So we could see a market reaction in that, and
Speaker 2: then there also might be a reaction when it comes
Speaker 2: to the US dollar, which has moved around a lot
Speaker 2: in the last couple of weeks, it's been very strong
Speaker 2: under Donald Trump, just by way of Trump being elected,
Speaker 2: and you know, Scott Bessett, just to talk about him
Speaker 2: for a moment, he did say on Fox a couple
Speaker 2: of days ago that the dollar loves Trump. So a
Speaker 2: strong dollar is a reflection of approval for Trump. But
Speaker 2: we could also then expect to hear some comments on
Speaker 2: is this a secretary designate who is going to then
Speaker 2: really work hard to implement weaker dollar policies that Trump
Speaker 2: has often talked about. Beyond that, I think we're going
Speaker 2: to find out I think soon what the first hundred
Speaker 2: days or you know, Q one tasks are going to be.
Speaker 2: In terms of economic policy, I think in terms of
Speaker 2: like how quickly they can resolve any kind of debt
Speaker 2: sealing standoff issues. But also tax policy is going to
Speaker 2: be the first one that needs to be resolved by
Speaker 2: the end of twenty twenty five, when Trump's tax cuts
Speaker 2: from twenty seventeen some of them expire, and that's sort
Speaker 2: of a first chance for Trump's economic policy team, probably
Speaker 2: led by the Treasure Secretary, to have an impact on
Speaker 2: American consumers. So those are sort of the key points
Speaker 2: that we could see and imprint kind of quickly in markets,
Speaker 2: which can eventually trickle down to the economy.
Speaker 1: When it comes to economic policy, how important is stability.
Speaker 2: It's hugely important. Markets want to know, they want predictability
Speaker 2: and stability. They want to know where policy is headed.
Speaker 2: You know, personnel is policy. So if they see that
Speaker 2: there is personnel stability, that helps. Also when you have
Speaker 2: things like you know, when COVID hit. At that time,
Speaker 2: there was only one person on the economic policy team
Speaker 2: and the Trump administration who had any kind of relationship
Speaker 2: with Nancy Pelosi, who was then the House Speaker, and
Speaker 2: that was Steven Mnusian. So Mnusian and Pelosi were able
Speaker 2: to talk to each other, fine common ground and pass
Speaker 2: a COVID relief bill, you know, a trillion dollar COVID
Speaker 2: relief bill, rather quickly, when no one else in the
Speaker 2: Trump administration wanted to talk to Pelosi. And so the
Speaker 2: fact that those two were able to cultivate a relationship
Speaker 2: comes from the fact that there was continuity in who
Speaker 2: was running and overseeing economic policy.
Speaker 1: Sealia, thanks very much, happy to join. Thanks for listening
Speaker 1: to the Big Take DC podcast from Bloomberg News. I'm
Speaker 1: David Gura. This episode was produced by Julia Press. It
Speaker 1: was mixed by Alex Segura and fact checked by Andreana Tapia.
Speaker 1: Senior producer Naomi Shaven and Wendy Benjaminson edited the episode.
Speaker 1: Wendy and Elizabeth Ponso provide editorial direction. Nicole Beamster bor
Speaker 1: is our executive producer. Sage Bauman is Bloomberg's head of podcasts.
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