Trump’s safe Treasury pick suggests he doesn’t want to rock the boat on Wall Street

Analysis by David Goldman, Matt Egan and Elisabeth Buchwald, CNN

(CNN) — President-elect Donald Trump’s Treasury secretary pick stands in stark contrast to some of the more controversial and questionable Cabinet picks he’s announced so far. Scott Bessent won’t freak out Wall Street, the industry he’s set to oversee.

Treasury secretary is a serious job for a serious person who can meet immediate deadlines and pressures weighing on the financial markets from around the globe. In many respects, the Treasury secretary is the quarterback of the economy.

A radical selection could’ve rattled investors and added risk to Trump’s already complex economic agenda.

Wall Street was unfazed by the selection. Some applauded it.

“Scott Bessent has been considered by many observers to be one of the most respected and competent contenders,” said Judge Glock, a Manhattan Institute senior fellow. “He has maintained his ties to traditional business and financial groups as well as to Trump loyalists.”

In other words, Trump did not pick the Matt Gaetz or Robert F. Kennedy, Jr., of Wall Street to run Treasury.

That doesn’t mean that Bessent will push back on Trump’s policies, including higher and across-the-board tariffs, large-scale tax cuts or mass deportation of undocumented immigrants. Bessent is a relatively recent MAGA convert who founded hedge fund Key Square and previously worked as chief investment officer for Soros Fund Management. Last week, he wrote an op-ed on Fox News last week in support of Trump’s policy.

But Glock said Bessent would serve as a steady hand guiding the economy.

“On the issue that most sharply divides Trump and traditional business leaders – tariffs – Bessent has focused on tariffs’ value as a tool to encourage better deals with trading partners, which has a long and bipartisan history,” Glock noted.

One of the Treasury secretary’s jobs is to help keep Wall Street calm and confident during times of economic or market turmoil. In other words: Prevent a blip from becoming a panic. That’s why Bessent had been widely viewed as the frontrunner for the job before he ultimately claimed it.

Some parts of Trump’s circle, including Elon Musk, were publicly advocating for a disruptor in the role – namely Cantor Fitzgerald CEO Howard Lutnick, who Musk said “will actually enact change,” unlike Bessent who would be “business as usual.” Lutnick was ultimately selected for Commerce secretary – an important but ultimately less critical role for make-or-break decision-making in the marketplace.

A steady demeanor, a key trait of a successful Treasury secretary, likely served as a factor in Trump’s ultimate choice to go with Bessent.

“I don’t think there is a meaningful difference in tariff policy outcomes between Bessent or Lutnick,” said Isaac Boltansky, BTIG director of policy research. “But there are differences in temperament and experience that will matter when the next Treasury secretary is communicating with the public, lawmakers, and foreign officials.”

Choosing Bessent proves some guardrails on Trump still exist – especially when it comes to Wall Street and managing the country’s money.

“Scott understands markets, economics, people, and geopolitics better than anyone I’ve ever interacted with,” said Kyle Bass, a billionaire hedge fund investor at Hayman Capital Management, in an X post last week.

Markets as guardrails

During his first term, Trump obsessed over market moves, viewing the Dow Jones Industrial Average as a real-time barometer of his success. Trump regularly tweeted out even the most mundane market milestones, sharply departing from the hands-off approach his predecessors took with the market.

So Bessent will be charged with trying to enact policies that serve the president-elect’s agenda while keeping the market boom going.

That may not be easy: During Trump’s first-term trade war with China, markets tumbled multiple times at least in part due to fears about Trump’s trade policy.

For instance, in December 2018 markets were in turmoil due to fears about the US-China trade war. That market turbulence left Trump hungry to strike a deal with Chinese President Xi Jinping during a high-stakes meeting in Argentina, sources told CNN at the time. When markets failed to rebound, Trump expressed anxiety about plunging stocks and even worried the losses could damage him politically.

It’s easy to see how a similar story could play out in 2025 as Trump has vowed to impose 60% tariffs on China, a leading US trading partner and source of supplies and parts for American companies.

Economists have warned that Trump’s China tariffs and proposals for 10% to 20% across-the-board tariffs on all US imports will be inflationary.

A similar story could play out if investors and CEOs start to balk at Trump’s plans to deport millions of undocumented workers — a move that could also lift inflation.

Investors could also react very negatively if Trump made a move to push out Federal Reserve Chair Jerome Powell, with whom Trump has had a complicated and, at times, contentious relationship. The Treasury secretary works closely with both the central bank and the White House.

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