(Bloomberg) — Hedge fund boss Scott Bessent’s Friday nomination to become U.S. Treasury Secretary offers bond investors a glimpse into the incoming administration’s broad economic agenda after a protracted search which included multiple notable contenders.
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The $28 trillion U.S. Treasury bond market was already closed for the week when Bessent, who runs macro hedge fund Key Square Group, was officially nominated by President-elect Donald Trump. Until trading resumes early in the Asian session on Monday, investors and strategists are awaiting more details on Bessent’s views on fiscal policy and his next steps.
Here’s what Wall Street investors and strategists are saying:
Glen Capelo, who spent more than three decades on the bond trading desks of Wall Street and is now managing director of Mischler Financial Group.
“Scott is a fiscal hawk and will definitely be a positive overall for the economy and markets.”
“He wants to stop spending. “Bessent wants the Treasury Secretary to get back in line with the markets.” The essence of tariff policy under Bessent is that companies can have a certain amount of time to make sure they are boosting the U.S. economy or else they will face tariffs, Capelo said.
“It is not the tariff philosophy that the sky is falling and inflation is coming that many talk about. So I think it will be great for America.”
John Fagan, Director of Markets Policy Partners
Fagan, who led the U.S. Treasury’s markets monitoring group from 2014 to 2018, said Bessent’s past comments and opinions may change once he faces the reality of the role of Treasury secretary. “When people are in the markets, their comments about the markets are indelibly colored by what their book is.”
However, “when decisions are made about Treasury issuance, these are extremely consequential decisions that are made with large groups of people around the table and enormous amounts of data and considerations that really come from what is stable and predictable.”
Priya Misra, portfolio manager at JPMorgan Asset Management
“While the Treasury Secretary ultimately implements the administration’s fiscal policy, I am encouraged that the person in charge is very familiar with the markets.”
“Bessent has talked about a gradual approach to tariffs and has expressed his opinion on the need to control the deficit. “It suggests that Bessent wants to avoid a market reaction that would limit the administration’s trade and fiscal policy objectives.”