Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This week, confirmation hearings
Speaker 1: began for President elect Donald Trump's cabinet nominees.
Speaker 2: This hearing will come to order, and.
Speaker 1: On Thursday, Wall Street paid close attention to one of them,
Speaker 1: in particular, the Senate Finance Committee's hearing with Scott Bessant,
Speaker 1: the hedge fund manager who's in line to run the
Speaker 1: US Treasury Department.
Speaker 2: It's an honor and a privilege to be considered by
Speaker 2: this committee as the President's nominee for the Secretary of
Speaker 2: the Treasury.
Speaker 1: In his opening remarks, Besson outlined the vision he has
Speaker 1: for his role in Trump's administration.
Speaker 2: We must secure supply chains that are vulnerable to strategic competitors,
Speaker 2: and we must carefully deploy sanctions as part of a
Speaker 2: whole of government approach to address our national security requirements.
Speaker 2: And critically critically, we must ensure that the US dollar
Speaker 2: remains the world's reserve currency.
Speaker 1: Besson also spoke about extending Donald Trump's twenty seventeen tax cuts,
Speaker 1: and this.
Speaker 2: Is the single most important economic issue of the day.
Speaker 2: This is pass fail.
Speaker 1: With Besson's confirmation by a Republican controlled Senate all but
Speaker 1: assured the focus now shifts to what he'd do as
Speaker 1: Treasury Secretary. It's a job that entails everything from oversight
Speaker 1: of the twenty eight trillion dollar market for US government
Speaker 1: debt to imposing economic sanctions. From Bloomberg News, this is
Speaker 1: the Big Take. I'm David Gurra today on the show.
Speaker 1: Seleiah Mosen, a senior Washington correspondent and the host of
Speaker 1: The Big Take, DC, joins me to talk about how
Speaker 1: Scott Besson went from being a relative unknown to someone
Speaker 1: poised to hold one of the most powerful jobs in
Speaker 1: global economics. Heyce Leah, good to talk to you.
Speaker 3: Hey, David.
Speaker 1: So, Donald Trump nominated Scott Beson to be his Treasury
Speaker 1: sectory back in November. Here we are on the day
Speaker 1: of his confirmation hearing on Capitol Hill. What has been
Speaker 1: going on behind the scenes, both in Washington and in
Speaker 1: South Florida at mar A Lago in advance of this
Speaker 1: confirmation hearing today?
Speaker 3: Well, Bessint has been spending his time vetting candidates for
Speaker 3: a lot of Senate confirmed positions inside the Treasure Department.
Speaker 3: He has a goal, as we've reported in Bloomberg, that
Speaker 3: he wants to return the Treasure Department personnel to a
Speaker 3: group of people who are very market savvy and no
Speaker 3: markets really really well, because every couple of years there's
Speaker 3: an unexpected hiccup in markets, and that's when you need
Speaker 3: people who have experienced day to day in the plumbing
Speaker 3: of the global financial system. And that's a little bit
Speaker 3: of a ding at the Yellen Department. Both Republicans and Democrats,
Speaker 3: including people inside of Yellen's Treasure Department who have previously
Speaker 3: worked there, have said that Yellen's Treasury has been a
Speaker 3: lot of PhD economists without enough emphasis on personnel with
Speaker 3: market intuition and knowledge.
Speaker 1: I think Scott Besens is becoming more of a household name.
Speaker 1: I think it's safe to say he wasn't one before
Speaker 1: all of this. How has he gotten to this point
Speaker 1: in time? What steps did he have to take from
Speaker 1: going from somebody who, yes, might be well known in
Speaker 1: some corners of Wall Street to someone who's the all
Speaker 1: but confirmed Treasury Secretary.
Speaker 3: This is a great story, actually, David So our colleague
Speaker 3: Josh Green and I dug into this for our story
Speaker 3: on Bessent this week about how he went from having
Speaker 3: hosted a fundraiser for al Gore then in twenty sixteen,
Speaker 3: when Trump was running his first presidential bid. He did
Speaker 3: not align himself publicly with Trump, but once Trump won,
Speaker 3: he did donate a million dollars to Trump's inaugural committee,
Speaker 3: so just showing that, okay, he was a little Trump
Speaker 3: curious at that time. And what we discovered was that
Speaker 3: after Steve Bannon left the White House in the early
Speaker 3: part of the first term for Trump, Bannon met Vessont
Speaker 3: at a investor conference in Hong Kong, and they met
Speaker 3: and they ended up sitting together over lunch and had
Speaker 3: this long four hour conversation where according to Bannon, Vessent
Speaker 3: wasn't looking for access, which is usually what people are
Speaker 3: looking for, but really he just wanted to understand from
Speaker 3: an investor perspective, what are Trump's populist economic policies. And
Speaker 3: since then they apparently stayed in close touch. And it
Speaker 3: wasn't until after COVID, after Biden was in for a
Speaker 3: little bit that Besant started to reach out and forge
Speaker 3: deeper relationships or new relationships with key advisors close to
Speaker 3: Trump and really start building a profile. And he's known
Speaker 3: the Trump family for thirty years. He knew Trump's brother
Speaker 3: and even went to his funeral years ago, and so
Speaker 3: he was a familiar face, and it was through Don Junior,
Speaker 3: who he knew a little bit better, that he was
Speaker 3: able to get a meeting with Trump at some point.
Speaker 3: And then he started to write these notes for his
Speaker 3: hedge fund clients about the Trump rally and how stock
Speaker 3: markets really think or want Trump to win, and that
Speaker 3: got to Trump, and you would hear by the spring
Speaker 3: of twenty twenty four, Trump saying things like and how
Speaker 3: about that Scott Besson He's so smart? Markets really like him,
Speaker 3: and he started name checking him, and that's it was
Speaker 3: spring of twenty twenty four that Bloomberg reported that Bessett
Speaker 3: was in the mix with a couple of other people
Speaker 3: for treasure secretary if Trump wins. And so you just
Speaker 3: slowly saw Bessant out in the media writing op eds,
Speaker 3: doing TV hits, but also privately helping Trump write his
Speaker 3: economic policy speeches, trying to think outside the box and
Speaker 3: serve the president's populist agenda.
Speaker 1: Scott Bessett has done something remarkable, and I want you
Speaker 1: to explain how he's been able to do it, and
Speaker 1: that is he's ingratiated himself to present elect He's become
Speaker 1: his pick to lead the Treasury Department. That comes with
Speaker 1: all kinds of speculation about how erratic that might be,
Speaker 1: what what his life is going to be like if
Speaker 1: he's confirmed for this job, as it seems he will be.
Speaker 1: And all the while, he has instilled in Wall Street
Speaker 1: this sense of confidence that because he's worked at a
Speaker 1: hedge fund, because he has the background that he has,
Speaker 1: he's going to perhaps cast some stability on this administration.
Speaker 1: How has he done that?
Speaker 3: Yeah, it's a tightrope walk that he has done so far,
Speaker 3: and he has a long way to go to maintain
Speaker 3: all of this. He seems to really understand Trump's economic
Speaker 3: agenda and adhere to it. He does not come from
Speaker 3: a traditional part of Wall Street that has made most
Speaker 3: Treasure secretaries who have landed. You know men who have
Speaker 3: landed in that job, if they come from Wall Street,
Speaker 3: they come from Goldman and I'm talking about Bob Ruben,
Speaker 3: Hank Pulsen, and Stephen Mnush. But Bessett has really deep
Speaker 3: knowledge of how markets function. He has traded, he's run
Speaker 3: a hedge fund, He worked for George Soros. He was
Speaker 3: a participant when George Soros famed Miss Lee broke the
Speaker 3: pound in the nineties when he made this huge bet
Speaker 3: that government policy was not painting out well and it
Speaker 3: was damaging to the pound, and he basically shorted the
Speaker 3: pound and Bessett was part of that. And so that
Speaker 3: goes to show how well read he is in currency policy,
Speaker 3: how the interaction between government economic policy and currencies, where
Speaker 3: that meets, and so you can see that he really
Speaker 3: has spent a lot of time at that intersection between
Speaker 3: government economic policy and markets.
Speaker 1: So, Leah, I know your focus over these last couple
Speaker 1: of months has been on what he would do with
Speaker 1: the department if he's confirmed. Do we know now well
Speaker 1: how he would approach this role and does his vision
Speaker 1: for that, his vision for what a teratie secretary should do,
Speaker 1: does that match up with what the president elect thinks
Speaker 1: a treasury secretary should do?
Speaker 3: You know, I do think that it matches up. But
Speaker 3: as usual with Trump and the way that he governs,
Speaker 3: it's a very tight needle to thread.
Speaker 2: Usually.
Speaker 3: I think about the example of Stephen Mnushan, who was
Speaker 3: Trump's treasure secretary all four years in the first term.
Speaker 3: Now he lasted all four years. There was such high turnover,
Speaker 3: and Mnusian was able to do that through selective silences.
Speaker 3: You know, if policy decisions did not go the way
Speaker 3: that he thought they should, he would just kind of
Speaker 3: go quiet and not show up on Fox News or
Speaker 3: CNBC to talk about the policies. But he would never
Speaker 3: publicly break from the president. So Mnushan really understood that
Speaker 3: that this is the president's administration. He is my boss,
Speaker 3: and that is going to be the key to best
Speaker 3: and success. Now the interesting part will be when or
Speaker 3: if Trump makes a decision and it doesn't jibe with
Speaker 3: what markets want, and markets tank. Anyone market tanks, and
Speaker 3: with Trump, he really cares about what stock markets think
Speaker 3: of his policies. Now a lot of presidents do. Bill
Speaker 3: Clinton famously did in the nineties. I'm actually bond markets
Speaker 3: were able to trigger a change in Clinton's economic agenda,
Speaker 3: and that could happen with Trump and has happened. He
Speaker 3: kind of tests to see what is the market reaction
Speaker 3: to one idea or another. But he also does have
Speaker 3: a little bit of a steel stomach to weather some
Speaker 3: of that storm. So it's going to be really difficult.
Speaker 3: I think that's going to be one of Besson's challenges
Speaker 3: is how to maintain calm that Trump wants that market
Speaker 3: wants that Besnt wants that calm in markets while also
Speaker 3: carrying out a sometimes wild policymaking regime.
Speaker 1: Coming up after the break, the headwinds that Bessent could
Speaker 1: face during a second Trump administration. That's next. I'm talking
Speaker 1: with Seleiah Mosen, host of The Big Take DC, about
Speaker 1: Scott Bessant, who spent several hours on Thursday on Capitol
Speaker 1: Hill in a confirmation hearing he's President Elect Donald Trump's
Speaker 1: pick to be the next Secretary of the Treasury. When
Speaker 1: you look at what Scott Besant hopes to accomplish in
Speaker 1: this job, what are the challenges that he faces to
Speaker 1: implementing those policy priorities implementing the policy priorities of the
Speaker 1: president elect.
Speaker 3: The biggest challenge will be Trump and Trump's style of
Speaker 3: like sort of shooting from the hip. When he wants
Speaker 3: to make policy, he'll just tweet or post something on
Speaker 3: truth social and Bessett may or may not know that's coming.
Speaker 3: The example that I think of is in twenty seventeen,
Speaker 3: I was standing outside of the Treasure Department. All the
Speaker 3: Treasury officials are there, and it was we were all
Speaker 3: kind of hanging out because the President was going to
Speaker 3: walk the one hundred and fifty yards between the two
Speaker 3: buildings to come and visit Stephen Mnushan at the building
Speaker 3: and Secret Services marching through, the dogs, the guns, everyone's
Speaker 3: marching through. And there was a tweet I think that
Speaker 3: Trump said, well, there's going to be a report that
Speaker 3: Mnusi and his team are going to put out on
Speaker 3: what our tax policy plan is going to be, and
Speaker 3: they had no idea. I was standing next to a
Speaker 3: senior Treasury official and I showed him the story, and
Speaker 3: he raises eyebrows and leans over to his colleague and
Speaker 3: was like, we have to put a plan together. So
Speaker 3: that's the kind of thing that's going to happen.
Speaker 1: He has prioritized getting this country's fiscal house in order.
Speaker 1: That's going to run headlong into some of the policy
Speaker 1: priorities of the President lact namely extending these tax cuts
Speaker 1: that expire soon.
Speaker 3: Yeah, we are seeing a lot of signs that markets
Speaker 3: are interested in Washington reigning in budget deficits, and globally,
Speaker 3: you know, deficits are really high, and so it's a
Speaker 3: global problem. But the US is the world's largest economy
Speaker 3: and the owner of the world's all the safe haven
Speaker 3: assets like treasuries and the dollar, and so it has
Speaker 3: a bit more impact and influence on how things shake out.
Speaker 3: And so we are seeing that bond yields are testing limits,
Speaker 3: psychological limits, and part of the complex calculus of why
Speaker 3: that is happening includes concern about the country's fiscal trajectory.
Speaker 3: Now this is an age old thing in Washington. For decades,
Speaker 3: people talk about, yes, it's important cut the deficit. In
Speaker 3: when Democrats have the White House and all of Congress,
Speaker 3: nothing happens, and when Republicans have White House and all
Speaker 3: of Congress, nothing happens. The only way that historically that
Speaker 3: we've seen Washington pay attention to that problem is when
Speaker 3: markets throw a tantrum, and that happened in the nineteen nineties,
Speaker 3: and we may be seeing it happen again. And so
Speaker 3: Bessant has spoken about that publicly throughout twenty twenty four,
Speaker 3: about the importance of addressing the budget deficit problem, and
Speaker 3: he is We expect him to actually continue something from
Speaker 3: the first Trump term that then the Biden administration adopted,
Speaker 3: and that is bringing economic policy and national security, tying
Speaker 3: those closely together. And that might be one way into
Speaker 3: making sure the deficit problem is solved because it's a
Speaker 3: matter of national security to make sure that the global
Speaker 3: financial system and US markets function well.
Speaker 1: You mentioned you spoke with other people who know Scott
Speaker 1: Besson and how he works. What do they say about
Speaker 1: if he's going to succeed here, if he's going to
Speaker 1: be able to toe this fine line, walk that tightrope,
Speaker 1: as you said, between exuding calm, pleasing Wall Street, and
Speaker 1: also pleasing this president.
Speaker 3: The expectation is that Besant will be able to navigate it.
Speaker 3: There are always trip ups, and as reporters, we all
Speaker 3: love to write about those. There's always a moment where
Speaker 3: any treasure secretary, from Bob Rubin to Tim Geitner to
Speaker 3: Hank Paulson, you name it, Steven Mnush and Janet Allen,
Speaker 3: there's a moment where their words, because they can move markets,
Speaker 3: they matter so much, and each nuance and the phrasing
Speaker 3: matters so much that they trip up and markets move
Speaker 3: when they weren't supposed to, and those little trip ups
Speaker 3: will happen. I think the best thing to do is
Speaker 3: to look at a secretary or any policymaker's entire tenure
Speaker 3: to see how they did, rather than just isolating one
Speaker 3: or two cases. So far as signs point to Bessant
Speaker 3: being a stable hand the way Steven Mnush was.
Speaker 1: But let's see Kaliah. Thank you absolutely. This is the
Speaker 1: Big Take from Bloomberg News. I'm David Gura. This episode
Speaker 1: was produced by Alex tie. It was edited by Aaron
Speaker 1: Edwards and Chris Ansi. It was fact checked by Adriana Tapia.
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