Trump’s Treasury Secretary picks Scott Bessent for Senate confirmation

Bessent believes the Federal Reserve should be able to make decisions about interest rates independently of the White House.

“In terms of monetary policy decisions, the FOMC should be independent,” Bessent said.

– Yun Li

Bessent said he expects inflation to be “much closer” to the Federal Reserve’s 2% target under Trump, while acknowledging that decisions by Congress and the central bank could play a role in the direction of inflation.

When asked by Democratic Sen. Maggie Hassan if he thought any of Trump’s proposed policies would increase inflation, Bessent replied, “Nothing that I can immediately think of.”

The proposed tariffs and government spending by the Trump campaign led to concerns among some economists and lawmakers that a Republican victory could put upward pressure on inflation.

— Jesse Pound

Russia, and especially oil companies, can look forward to tougher sanctions under the Trump administration.

“If any officials of the Russian Federation are watching this confirmation hearing, they should know that if I am confirmed and if President Trump requests as part of his strategy to end the Ukraine war, I will be 100% on board with that sanctions up , especially to the Russian oil companies to levels that would bring the Russian Federation to the table,” Bessent said.

-Jeff Cox

The United States has an urgent spending problem that is spiraling out of control, Bessent said at his confirmation hearing.

“We don’t have a revenue problem in the United States. We have a spending problem,” Bessent said. “This is one of the things that got me out from behind my desk and my quiet life in this campaign, was the idea that this consumption is out of control.”

Rising financing costs, along with continued growth in spending and declining tax revenues, have combined to cause deficits to rise and have pushed the national debt past $36 trillion.

The three-month fiscal year 2025 deficit rose to $710.9 billion, about $200 billion more than the comparable period in the previous year, or 39.4%.

“We’ve never seen this before when it’s not a recession or not a war,” Bessent said. “Treasury, along with full government and Congress, has used its borrowing capacity to save the Union, to save the world, and to save the American people, and what we have right now, we’d be hard-pressed to do the same.”

– Yun Li

Bessent used a question about Social Security as an opportunity to say there are no plans to lower payments from the program under the Trump administration.

“I want to emphasize that President Trump has said that Social Security and Medicare will not be touched,” Bessent said.

Potential cuts to Social Security next decade, based on current funding projections, is one of the issues looming during the deficit debate in Washington. Bessent said the government needed to get its “short-term house” in order before looking at other ideas, such as a top-up fund, to help support entitlement spending.

—Jesse Pound

Extending the so-called Trump tax cuts will be a top economic priority for the new administration, Bessent said in response to early questions at his confirmation hearing.

“This is the most important economic issue of the day,” he said in response to a question about renewing the 2017 Tax Cuts and Jobs Act. “This is pass-fail. If we don’t fix these tax cuts, if we don’t renew and extend, then we’re going to face an economic disaster, and as always with financial instability falling on the middle and working class.”

“We’re going to see a giant middle-class tax increase. We’re going to see the child tax credit cut in half,” he added. “We will see the deductions cut in half … It has the potential for a sudden stop,”

-Jeff Cox

Bessent has finished his opening statement and is now taking questions from senators.

The nominee’s opening statement was light on policy details, but generally agreed with Trump’s campaign points.

“As President Trump has said, we will unleash the American economy by implementing pro-growth regulatory policies, reducing taxes and unleashing American energy production. The breadth and depth of our capital markets, along with predictable, pro-growth tax policies and smartly updated regulation. will continue to do America the most popular destination in the world to start, grow and go public,” Bessent said.

—Jesse Pound

As Scott Bessent prepares to testify in the Senate on Thursday, he has already received a vote of confidence from investors.

The stock market rose immediately after Trump announced Bessent as his pick in late November, part of an extended rally for the market after the election.

The bond market also rose iShares 20+ Year Treasury Bond ETF (TLT) climbing 2.6% on Nov. 25, the first trading day after Trump’s announcement. Bond prices move opposite to returns.

Bessent’s previous experience in the hedge fund world and familiarity with Wall Street may have helped assuage investor concerns that Trump’s policies are disrupting markets.

—Jesse Pound

Scott Bessent, the nominee for Treasury secretary, was one of the advisers working on a plan for President-elect Donald Trump to impose tariffs more gradually. Bloomberg News reported earlier this week.

The plan could involve a schedule of graduated rates that rise by about 2% to 5% a month at trading partners, Bloomberg reported, citing people familiar with the matter. The proposal has not been finalized yet and has not been presented to Trump, the people told Bloomberg.

Kevin Hassett, who will be the director of the National Economic Council, and Stephen Miran, the nominee to lead the Council of Economic Advisers, were also involved in the discussions, Bloomberg reported.

– Yun Li

Without mentioning tariffs, Treasury Secretary nominee Scott Bessent is pushing for a policy of muscle when it comes to defending American interests abroad.

“We must secure supply chains that are vulnerable to strategic competitors, and we must carefully implement sanctions as part of a whole-of-government approach to meet our national security requirements. And critically, we must ensure that the US dollar remains the world’s reserve. currency,” Bessent said in remarks prepared for his testimony before the Senate Banking Committee.

President-elect Donald Trump has promised across-the-board tariffs against America’s global trading partners, although it is possible he could tailor the tariffs against certain goods and services.

-Jeff Cox