What’s in Trump’s Treasury Secretary Scott Bessent’s Playbook?

In November, President-elect Donald Trump tapped Scott Bessent, a billionaire hedge fund investor, as his pick for Treasury secretary, a role that will advise the incoming President on key economic policies. Bessent stood out from a roster of high-profile Wall Street contenders including Apollo CEO Marc Rowan, Cantor Fitzgerald CEO Howard Lutnick and JPMorgan Chase’s Jamie Dimon.

Bessent, 62, will replace Janet Yellen as the Treasury secretary, pending a Senate confirmation. Unlike Yellen, who rose to prominence through prestigious academic halls and public service roles including Federal Reserve chair from 2014 to 2018, Bessent made his name in the private sector, most notably serving as the chief investment officer for George Soros’ family office from 2011 to 2015 before starting his own fund, Key Square Group.

In 1992, while leading Soros Fund Management’s London Office, Bessent used the fund’s heavy war chest of capital to trade $10 billion against the weakening British pound, eventually forcing the Bank of England, the U.K.’s central bank, to intervene to support the currency. In another high-profile trade in 2013, he earned $1 billion in profit in three months trading Japanese yen.

What does the secretary of Treasury do?

Treasury secretary is one of several key economic advisor to the President. Other important advisory roles within the executive branch include commerce secretary, labor secretary and Federal Reserve chair. Each covers unique and overlapping economic policy responsibilities.

Treasury secretary’s function is similar to that of a CFO, broadly responsible for collecting money and making payments on behalf of the federal government. This includes enforcing tax and tariff laws, running the Internal Revenue Service, managing finances for government agencies and servicing the national debt. Treasury secretary also oversees treasury operations, including the production of coins and currency, and represent the U.S. at the International Monetary Fund and World Bank.

In times of financial crises, investors often look to Treasury secretary for guidance. In January 2023, when Congress was in gridlock due to the inability to pass legislation that would raise the debt ceiling, putting the U.S. at risk of defaulting on its debt for the first time, Yellen calmed markets by taking extraordinary measures, including halting the reinvestment of government securities held by a federal employee retirement fund that counted towards the debt ceiling. As described by the New School economics professor Steven Pressman at the time, “This is essentially money the government owes itself.” By doing this, Yellen temporarily reduced the debt level, creating room to fund other federal operations.

During the 2008 Financial Crisis, President George W. Bush’s Treasury Secretary Henry Paulson played an instrumental role in drafting the $700 billion financial bailout plan. He famously told Senate leaders the government needed the financial equivalent of a bazooka.

“If you’ve got a bazooka, and people know you’ve got it, you may not have to take it out,” he said. Essentially, Paulson argued that, if markets felt that the Treasury Department had the funds to bail out Fannie Mae and Freddie Mac in case the crisis worsened, investors would have the confidence to keep their money in the financial system, thus restoring trust in financial institutions without having to actually spend the bailout money.

What’s in Bessent’s playbook?

Bessent has high ambitions for his upcoming role, saying he wants to borrow former Japanese Prime Minister Shinzo Abe’s “Three Arrows” approach that helped Japan recover from its decades-long recession. In a 2013 speech, Abe described the “three arrows” as “bold monetary policy, flexible fiscal policy, and a growth strategy that encourages private sector investment.”

Bessent’s version will also include a “3-3-3” plan: increase GDP growth to 3 percent; cut the budget deficit to 3 percent of GDP; and raise U.S. oil production to three million barrels per day. With expectations that the U.S. economy growth could slow from 2.8 percent to 2.2 percent in 2025, Bessent’s strategy aims to help the economy reach its highest potential. While monetary and energy policies are beyond his domain, Bessent may also wield enormous influence on policymakers to achieve these goals.