Business leaders say they are relieved that President-elect Donald Trump made a safe choice to lead the Treasury Department after more unconventional selections at other cabinet posts.

Hedge fund executive Scott Bessent has survived an internal feud over the role of Treasury secretary, a key position he will face. almost immediate deadlines and pressures.

Bessent’s background as an international investor who worked with legendary money managers and his history of supporting Republicans and Democrats have assuaged the concerns of business and financial market leaders.

The Dow Jones jumped nearly 500 points Monday morning. The S&P 500 gained 0.75% and the Nasdaq Composite rose 0.8%. Treasury yields fell and the dollar fell.

“It’s a huge relief,” said Jeffrey Sonnenfeld, founder and president of the Yale Chief Executive Institute. “Bessent is reasonable and pragmatic. »

Jamie Dimon, CEO of JPMorgan Chase, one of the most powerful executives on Wall Street, is also a fan. Dimon has a very high opinion of Bessent and thinks he is an excellent choice, a source close to Dimon told CNN on Sunday.

Bessent, 62, has worked with some of the world’s most renowned investors, including Jim Rogers, Jim Chanos, Stanley Druckenmiller and George Soros.

The Treasury secretary position is one of the most crucial hires of any administration, but especially this one given Trump’s focus on the economy and voters’ deep frustration with the cost of living.

Bessent will act as Trump’s quarterback and execute his economic agenda. And for this key position, Trump has chosen a choice that is unlikely to result in a contentious confirmation battle.

Sonnenfeld, known as the “CEO Whisperer” for his directory of business contacts, said Corporate America’s hope is that Bessent can moderate some of Trump’s more aggressive campaign promises that mainstream economists fear will do not revive inflation.

This includes mass evictions that threaten to starve workers in key sectors, potentially influencing Federal Reserve policy and widespread tariffs on $3 trillion in U.S. exports.

“Bessent is in favor of using tariffs as a stick. He is in favor of selective tariffs. But he understands that the Smoot-Hawley tariffs exacerbated the Great Depression,” Sonnenfeld said, referring to the infamous tariffs of 1930 imposed by Congress. “He doesn’t want a second Smoot-Hawley.”

Of course, even if Bessent is a voice for moderation in Trump’s debates over tariffs and deportations, that doesn’t mean he will necessarily win those arguments, which will ultimately be decided by Trump himself.

And while investors applaud Bessent’s selection, it’s far too early to know whether he will also be a win for Main Street.

“Wall Street may be breathing a sigh of relief over Scott Bessent’s nomination, but working people don’t see any help coming their way,” Sen. Elizabeth Warren, expected to become the committee’s top Democrat, said Monday Senate of Banks. . “Mr. Bessent’s expertise helps wealthy investors make more money, without reducing costs for families crushed by corporate profits.

Not inflationary

In a Saturday radio interview with Larry Kudlow, Bessent said “tariffs can’t be inflationary, because if the price of something goes up, unless you give people more money, then they will have less money to spend on the other thing, so there is no inflation.

“Inflation results from either an increase in the money supply or an increase in government spending, and that’s what happened under Biden,” he added.

Yet many economists continue to warn that tariffs – particularly the across-the-board tariffs promised by Trump – will drive up prices.

Goldman Sachs told clients in a note late Sunday that the biggest risks to inflation are related to policy, particularly tariffs. The bank warned that a 10% across-the-board tariff would raise core prices by about 1% and delay a return to the Federal Reserve’s 2% inflation target.

Bessent beat Cantor Fitzgerald CEO Howard Lutnick, who was also in the running for Treasury secretary and had been endorsed by Elon Musk. Trump instead chose Lutnick as Commerce secretary, another key role, but not as important as Treasury.

“Lutnick is a bull in a Chinese store. Industry CEOs were concerned about Lutnick’s personality,” Sonnenfeld said.

Anthony Scaramucci, Trump’s chief financial officer and former adviser, who has since become a staunch critic of Trump, praised Bessent on X as “a great guy and a safe, steady pair of hands for the country.”

An “exceptional” choice

Jay Timmons, the CEO of the manufacturing trade group who in January 2021 called on Vice President Mike Pence to invoke the 25th Amendment to remove Trump from powerpraised Trump’s decision to hire Bessent.

“Scott’s deep expertise in financial markets and dedication to fostering economic growth make him an exceptional choice to lead the Treasury Department,” Timmons, CEO of the National Association of Manufacturers, said in a statement a few minutes ago after Trump announced the selection.

Timmons expressed hope that Bessent, who said the Biden administration has “out of control government spending,” would help make Trump’s promise to extend the 2017 tax law a reality.

Center-left economists and progressives worry about the same outcome.

Larry Summers, who served as Treasury secretary during the Clinton administration, warned of a supply shock linked to Trump’s economic plan in an interview broadcast Sunday with CNN’s Fareed Zakaria. He argued that rising prices would be caused by even larger tariff hikes than those imposed by Trump during his first term, as well as a labor shortage that hurts farmers and residential construction.

Summers said he has “no doubt that the Trump package is a far greater stimulus against inflation than anything President Biden has enacted.”

“For all his talk about protecting the American working class, President-elect Trump’s choice of a billionaire hedge fund manager to lead the Treasury Department shows he simply wants to maintain a rigged system that only works for big businesses and the very rich.” Tony Carrk, executive director of the progressive group Accountable.US, said in a statement Friday. “Scott Bessent’s first order of business will be to deliver trillions of dollars in additional tax cuts to the wealthy.”

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