Scott Bessent speaks at the National Conservative Convention in Washington, DC, Wednesday, July 10, 2024.
Dominic Gwynn | AFP | Getty Images
Financial markets welcomed President-elect on Monday Donald Trumpof Select U.S. Treasury Secretaryglobal currencies rallied on hopes that hedge fund manager Scott Bessent could take action some stinging Because of Trump’s more extreme economic views.
this dollar indexThe dollar’s gauge against six major currencies fell 0.8% to 106.65 on Monday, giving back some recent gains after rising sharply since late September.
this EUR The top performer was up more than 1% at 1:30pm London time, trading at $1.0522. The Japanese yen, pound and Australian currencies were also higher against the dollar.
The moves come as global investors reacted to news late on Friday that Trump expressed his intention to nominate Bessant to lead one of the most influential positions in the U.S. government. The Treasury has broad oversight powers over tax policy, public debt and international finance.
Strategists view Bessent, founder of Connecticut-based investment firm Key Square Group, as a “reliable lieutenant,” a well-known market player and a more selective player than some of his rivals. mild.
The 62-year-old leader is expected to push Trump to consider softer tariffs, loosen regulations to boost growth and target deficit spending.
“Trump’s choice for Treasury secretary has further boosted investor sentiment, with Wall Street expected to rise again,” Susannah Streeter, head of currencies and markets at Hargreaves Lansdown, said in a research note.
She added: “Hedge fund manager Scott Bessent’s long career through market twists and turns has bolstered confidence in upcoming pro-business policies and heightened expectations that any tariffs will Highly targeted and likely to reduce inflation.
A ‘tiered’ tariff approach
Trump’s historicity election victory earlier this month Concerns intensify The prospect of rising prices has prompted strategists to reconsider the outlook for global bond yields and currencies.
It is widely believed that Trump’s pledge to implement tax cuts and steep tariffs may boost U.S. economic growth, but expand the fiscal deficit and exacerbate inflation.
On November 23, 2024, an employee was sorting navel oranges at the Nongfu Spring Fruit Processing Factory in Xinfeng County, Ganzhou City, Jiangxi Province.
China News Service | China News Service | Getty Images
To boost revenue, Trump suggests he could implement package of measures 20% tariff Imposing tariffs on all goods imported into the United States up to 60% For Chinese products and a Up to 2,000% Applies to vehicles made in Mexico.
While many economists are skeptical about the effectiveness of tariffs, Bessant defend them As “a useful tool in achieving the President’s foreign policy objectives.” However, he also called for a gradual “layered” tariff imposition.
“News that Scott Bessant is the top choice for the incoming U.S. Treasury secretary raises the possibility that some ‘Trump deals’ may be watered down,” analysts at Rabobank said in a research note.
They added: “Bessent is a successful macro hedge fund manager who favors reducing the U.S. budget deficit to 3% of GDP, a clear indication of waning appetite for deficit spending.”
Bessent, who has worked for billionaire philanthropists and investors George SorosHe once advocated the so-called “3-3-3” goal, which planned to reduce the deficit to 3% in 2028, achieve economic growth of 3%, and add 3 million barrels of oil per day.
Is business as usual?
Some strategists expect Trump’s pick for Treasury secretary to be popular, which is good news for Asian currencies in the coming months.
Scott Spratt, corporate and investment strategist at Societe Generale, said: “The market views Bessant as a ‘safe hand’ candidate, and U.S. Treasuries may see some relief after Monday’s opening as the risks of more unorthodox candidates have been eliminated. Digest it.
“We suspect his view that tariffs should be ‘layered’ and that the initial levels being discussed are a ‘maximalist’ stance should also provide an opening boost for Asian FX and (the yuan),” he added.
On November 19, 2024, US President-elect Donald Trump prepared to exit after watching the sixth test flight of the SpaceX Starship rocket in Brownsville, Texas, USA.
Brandon Bell | Reuters
Tesla CEO Musk suggestion Bessant’s nomination as finance minister will be disappointing. In a Nov. 16 social media post via
Bessant is also an advocate of Trump’s embrace of the cryptocurrency industry, which means he may soon become the first Treasury Secretary to publicly support crypto assets. Trump has previously promised to make the United States “The Cryptocurrency Capital of the Earth”.
Bitcoin Breaking through the $99,000 mark That was the case for the first time last week, as investors continued to price in Trump’s return to the White House.
