Trump’s Treasury Pick Wants Shadow Fed Chair, Maybe Weak Dollar

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(Bloomberg) — Scott Bessent, the veteran hedge fund manager who Donald Trump picked to become the next Treasury secretary, wants tariffs, a shadow chair for the Federal Reserve and maybe a weaker dollar.

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If confirmed by the Senate, he will have a sprawling remit: oversee public financing, economic sanctions and the Internal Revenue Service; engage in international economic diplomacy; and help ensure the smooth functioning of financial markets. Bessent, who currently runs macro hedge fund Key Square Group LP, will be crucial to implementing the president-elect’s agenda, which includes renewing some of Trump’s 2017 tax cuts that expire next year and loosening financial regulations.

Below is a roundup of what Bessent has said over the past year on policies that will influence the US economy.

Federal Reserve

Trump has said that a president should have some say over interest rates and monetary policy, a move that would undercut the longstanding independence the central bank has enjoyed from the executive branch. Bessent doesn’t seem to disagree with Trump, and even criticized the Fed himself in September after its jumbo rate cut.

  • “If you were concerned about the integrity of the institution, you would not have done it. You especially would have not done a jumbo cut. In reputation, everything is optics … tell me on what planet is it conceivable that waiting two months is make or break, versus the integrity of the institution.” — Bloomberg News, Oct. 11

Bessent will also have a hand in helping Trump choose a replacement for Fed Chair Jerome Powell when his term expires in May 2026, and at least three other appointments to the board in the next four years. Trump has flirted with the idea of firing Powell before, but Bessent has floated a fresh idea.

  • “You could do the earliest Fed nomination and create a shadow Fed chair. And based on the concept of forward guidance, no one is really going to care what Jerome Powell has to say anymore.” — Barron’s interview, Oct. 9.

  • “If you believe forward guidance is good, why can’t you give forward guidance on who the Fed chair is going to be. You could do one of two things: The current Fed chair could be reappointed, so you’ve created a path there. Or the new Fed chair nominee would give forward guidance beyond the current Fed chair’s sell-by date.” — Bloomberg Radio on Oct. 11.

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