Trump appointed hedge fund chief Scott Besant to lead the US Treasury

President-elect Donald Trump has said he is running for office Scott Besantwho runs a macro hedge fund Key Square GroupThe next US As Treasury secretary, he has vowed to implement a second term, hiring a top adviser to manage a broad economic agenda.
“Scott has long been a strong advocate of the America First agenda,” Trump said in a statement on Friday. “On the eve of our great country’s 250th anniversary, he will help me usher in a new golden age for the United States, as we strengthen our position as the world’s leading economy.”
Bessant, 62, emerged as the choice for Treasury chief after an extended search that saw Trump consider multiple candidates — and Wall Street executives and business leaders vie to influence the president-elect’s decision. Aides believed that Trump sought a candidate who would be favored by both Wall Street and an electoral base eager for him to implement sweeping tariffs, embrace cryptocurrency and crack down on undocumented immigration.
Besant defeated other leading contenders, including Apollo Global Management Inc. executive Mark Rowan, former Federal Reserve Governor Kevin Warsh and Tennessee Senator Bill Hagerty, as well as Trump transition co-chair Howard Lutnick, who was named to lead the Commerce Department.
If confirmed by the US Senate, Besant would be the first openly gay Treasury chief, and one of the richest in modern times. Besant has said he always wanted to serve his country, but his sexuality in the 1980s prevented him from attending the US Naval Academy and joining the State Department after graduating from Yale University.
He joins an economic team that took shape just weeks after Trump won a second presidential term. Trump announced that his former budget director, Russ Watt, would return to the same role in a statement on his social media platforms later Friday.
“He did a great job in this role in my first term – we cut four regulations for every new regulation, and that was a great success!” Trump said.
Watt, the chief architect of Project 2025, the controversial Heritage Foundation policy document released during the campaign, will work alongside Besant to implement Trump’s economic agenda.
Political Thickets
As the nation’s highest-ranking economic policymaker, Besant has to navigate the political thicket in Washington, lead international economic diplomacy and know how to navigate Wall Street in crisis situations. It will also be closely watched by investors and financial institutions, who are looking for predictability and stability.
He has been an advocate of realigning US currency policy, but has stopped short of supporting an overt strategy of devaluing the dollar. During Trump’s first term, the then-president called the dollar’s appreciation harmful to US manufacturers and even considered government intervention to manage the greenback’s value.
Besant acknowledged that while a weaker dollar would be good for some parts of the economy, some of Trump’s proposals would increase its value.
He has criticized President Joe Biden’s administration for its handling of federal debt financing, and has talked about expanding its “friendshoring” policy to create a tiered system among trading partners.
At the Treasury, Besant is expected to advise Trump on candidates to chair the Federal Reserve when that job opens in May 2026. Earlier this year, he talked about the idea of ​​nominating a new Fed chair before current chair Jerome’s term expires. Powell’s tenure. Financial markets will look to that shadow Fed chair rather than Powell, Bessant has said.
He has said the Fed was too slow to respond to rising inflation in 2021, and criticized the US central bank for its big interest rate cut in September.
Besant spent part of his career managing money for billionaire George Soros. He lived in London and was part of the team, under Stan Druckenmiller, that made $1 billion shorting the pound in 1992 – a bet that helped pull the currency out of the European exchange rate system, and made Soros famous as the man who broke the pound. . Bank of England.
He would be the second Treasury secretary, after Steven Mnuchin, to work for groups with close ties to Soros.
Soros’ family office made about $10 billion in profits under Besant as investment chief, or about 13% annually. Since then, he has run Key Square, which began with a $2 billion investment from Soros — funds he later returned when other investors came in.
“I think it would be outstanding,” Druckenmiller said. “Having worked for me and George for so many years, he has been exposed to everything that a Treasury Secretary has to deal with. He has a deep knowledge of markets and is also an intellectual who has the ability to work with academic policy makers. It is a rare combination.”
Besant will return capital to its hedge fund clients as soon as possible after Dec. 1, according to a person familiar with its plans. Federal rules require cabinet members to develop plans to eliminate their potential conflicts of interest, and then to follow through on them, usually within 90 days.
Here’s a look at some of the key areas of responsibility for the Treasury Secretary role:
Supervise, do
Besant is expected to play a key role in pushing Congress to renew Trump’s 2017 tax cuts, many of which are set to expire at the end of 2025.
The Treasury chief could be charged with reaching out to Republicans in Congress to expand the scope of the tax bill to include some of Trump’s campaign-trail tax promises, including a 15% corporate rate and exempting tipped wages from taxation.
The Treasury Secretary is also charged with running the Financial Stability Oversight Council, a panel formed after the financial crisis. Under outgoing Treasury Secretary Janet Yellen, the FSOC addressed the issue of climate change, triggering criticism from Republicans who are wary of any requirement for banks to include climate in their lending or capital decisions.
FSOC under Yellen also recommended stronger oversight of stablecoins, which the Fed likens to bank deposits and money market funds — and which are subject to more regulation. Trump’s advocacy of the crypto space on the campaign trail will likely put the new Treasury chief’s stance under the spotlight.
Economic Diplomacy
Meetings of finance chiefs from the Group of Seven, the G-20 and other international organizations are held throughout the year, with the Treasury Secretary usually attending as the chief US representative.
The Treasury Department enforces US sanctions on foreign countries, companies and individuals, the number of which has increased over the past several years. Yellen helped lead efforts at the G-7 to isolate Russia after its full-scale invasion of Ukraine and increased financial support for Kiev.
The Secretary has also served as the point person on engagement with China several times. The Treasury chief tends to sound cautious when it comes to proposals aimed at America’s biggest strategic rival. Mnuchin, Trump’s treasury head in his first term, was seen playing that role when tensions rose in 2018 and 2019.
Debt Management
In charge of the nation’s purse strings, Besant faces a costly, and ballooning, debt load. The federal budget deficit rises to 6.4% of GDP in fiscal year 2024, historically high for a time of economic expansion and full employment. The main driver is rising interest costs following the Fed’s rate hikes in 2022 and 2023.
“No one is more panicked about this debt stack and the coming refinancing,” Besant said on a recent War Room podcast with longtime Trump adviser Stephen Bannon. What could “stabilize the bond market” is a fiscal package that reins in spending, he said.
Besant has also complained about the Treasury’s debt financing strategy, claiming Yellen was trying to juice the economy and helping her boss ahead of the November election — a charge she denies.
Debt managers may need to be proactive in managing Treasury liquidity, as the federal debt ceiling is set to resume in early January. That prevents the department from issuing new debt, and triggers an often orchestrated sequence of maneuvers to prevent the US government from running out of cash or, worse, defaulting on its debt — an event that could have disastrous consequences.
Glenn Cappello, who spent more than three decades on a Wall Street bond-trading desk and is now a managing director at Mishler Financial Group, calls Besant a “fiscal hawk.”
“That would certainly be positive overall for the economy and the markets. He wants to rein in spending. Bessant wants to get the Treasury secretary back with the markets — because he thinks Janet Yellen has turned the issue a little bit,” Capello said.