Wall Street veteran Scott Bessent nominated to be Trump’s treasurer – and he could not be extra completely different from Rachel Reeves!

The contrast between the CVs of US President-elect Donald Trump’s nominee for Treasury Secretary Scott Bessent and Chancellor Rachel Reeves could not be more stark.

Bessent is a seasoned Wall Street figure with expertise on making the right calls on the world economy.

Reeves has a limited and disputed record of working in the private sector at the failed consumer bank HBOS, which was swallowed by Lloyds at the height of the 2008 great financial crisis. 

Amid the rich variety of Trump choices for his Cabinet, the selection of Bessent, 62, is among those least likely to trouble the scorers when it comes to the confirmation hearings.

Bessent actively campaigned for Trump’s election and was a donor to his campaign. His credentials for America’s top finance job are seen in Washington as more akin to other established Wall Street figures who have served in the post. 

This cast list includes such luminaries as Robert Rubin, who served Bill Clinton, and Hank Paulson, who helped steer the George W Bush White House through the great financial crisis.

Seasoned figure: Scott Bessent has proven expertise on making the right calls on the world economy

Bessent has been lauded by some global analysts as the next James Baker. He was the stately Texan lawyer who revived the Group of Five, later to become the G7 with the addition of Canada and Italy, as the steering group for the world’s most prosperous democracies.

The markets broadly have welcomed the Bessent choice. Stocks of firms involved in global trade rallied on the grounds that he understands international trade, is less than enthusiastic about tariffs and has developed relationships with key finance ministries such as Japan, the world’s third-largest economy.

His less assertive view of tariffs may sit awkwardly with the President-elect’s determination to hit Mexico and Canada with a 25 per cent trade duty and China with 60 per cent.

Bessent is openly gay. He was educated at Ivy League Yale College where he studied political science. His career and reputation rests on his years as a macro hedge fund manager. 

Such financiers specialise in taking big positions in currency and share markets on the basis of geo-economic and political trends. 

He first drew public attention as the lieutenant of George Soros, who helped devise a strategy of betting against Britain and the Bank of England when it was expelled from the exchange rate mechanism (ERM), the precursor of the eurozone, in October 1992.

Bessent profitably made a similar bet against sterling in 2016 ahead of the surprise referendum result which saw Britain leave the European Union.

His deep knowledge of the UK, its politics and its economic convulsions could make him a difficult intercessor for Reeves. 

The Chancellor long has regarded the current Treasury Secretary Janet Yellen as a role model and hero who features in her controversial book The Women Who Made Modern Economics. 

Reeves made a point of calling on Yellen in Washington for the IMF meetings in October just days before her £40billion tax-raising Budget. 

At the core of Bessent’s known thinking is what he has described publicly as the ‘3-3-3’ plan. 

The goal is to achieve 3 per cent annual growth for the US economy, reduce the budget deficit to 3 per cent of total output and increase domestic oil production by 3m barrels.

The Treasury nominee is less definitive on tariffs. He has suggested that the Trump proposals are a ‘maximalist’ and a negotiating ploy, as described by the President-elect in his book The Art Of The Deal. 

Support: Bessent, has suggested that the Trump proposals are a ‘maximalist’ and a negotiating ploy as described by the president-elect (pictured) in his book The Art Of The Deal

Bessent also has been sceptical about Trump’s suggestion that companies which manufacture products for the US market in America could pay a lower corporation tax rate of 15 per cent.

The would-be US Treasury boss has suggested this might be difficult because it could breach international tax agreements.

Bessent could probably learn from the playbook of the US Treasury Secretary in Trump’s first term, former Goldman Sachs banker Steven Mnuchin. 

He managed to dissuade Trump from making the harshest trade decisions and sought to calm markets when the White House disregarded US Treasury advice.

Most of Bessent’s commercial life has been spent in hedge funds. After Yale, he joined Jim Rogers, a partner of Soros, as an intern and spent most of the 1990s working at Soros Fund Management. 

His own fund, Key Square Capital Management, has a mixed record and there has been a steady outflow of funds.

But in 2024 he called it correctly, noting that political and economic analysts were too negative on a Trump victory and what it would mean for the economy. 

He placed big bets that stocks and the dollar would surge after November 5. As a result, his funds have scored double digit gains this year.

As Britain knows to its discomfort, the US Treasury nominee has an uncanny eye for spotting market discrepancies. He was an early supporter of Japan’s long-serving prime minister Shinzo Abe, who stepped down in 2020. 

Abe was notable for his three arrows of expansive monetary policy, tight fiscal policy and an aggressive growth target. That may well echo Bessent’s strategy for the US unless distracted by trade wars.

Bessent inherits a fast-growing US economy powered by the high productivity of its tech sector.

In contrast to Reeves and the UK, he is unlikely to threaten economic expansion by increasing the tax burden on business and wealth creators.