(Bloomberg) — Hedge fund boss Scott Besent’s nomination Friday for U.S. Treasury secretary is offering bond investors a glimpse into the incoming administration’s sweeping economic agenda after an extensive search that included several prominent contenders.
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The $28 trillion U.S. Treasury market was effectively closed for the week when Bessent, who runs macro hedge fund Key Square Group, was formally nominated by President-elect Donald Trump. Until trading resumes early Monday in Asia, investors and strategists are waiting for more details on Besant’s views on fiscal policy and his next steps.
Here’s what Wall Street investors and strategists are saying:
Glenn Cappello, who spent more than three decades on Wall Street’s bond trading desks, is now a managing director at Mishler Financial Group.
“Scott is a financial hawk and will certainly be generally positive for the economy and markets.”
“He wants to rein in spending. Besant wants to get the Chancellor back in line with the markets. The crux of the tariff policy under Besent is that companies may have a certain amount of time to make sure they are fueling the U.S. economy or else face tariffs, Capello said.
“It’s not the tariff philosophy that a lot of people talk about. Inflation is coming. So I think it’s going to be great for America.”
John Fagan, Director at Markets Policy Partners
Fagan, who ran the US Treasury’s Markets Oversight Group from 2014 to 2018, said Besent’s previous comments and views would change once he faced the reality of the Treasury secretary’s role. “When people are in the markets, their commentary on the markets is indelibly tinged with what their book is.”
However, “when decisions are made about issuing Treasuries, those are very important decisions and they are made with large groups of people around the table and huge amounts of data and considerations that really stem from what is stable and predictable.”
Priya Misra, Portfolio Manager at JPMorgan Asset Management
“While the Secretary of the Treasury ultimately implements the administration’s fiscal policy, I am encouraged that the person in charge is very familiar with the markets.”
“Besent has talked about a gradual approach to tariffs and has been vocal about the need to control the deficit. This suggests that Besnett wants to prevent a market reaction that would constrain the administration’s goals on trade and fiscal policy.”
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