The market’s abuzz with the news of Scott Bessent’s nomination to Treasury Secretary. He’s widely seen as a “safe pair of hands” (CNBC) that could balance out Trump’s historically volatile approach to trade and the economy. He’s also not as much of a wild card cabinet candidate as some of Trump’s other nominations. In a Wall Street Journal op-ed this month, Bessent is interested in deregulation, “overhauling the regulatory and supervisory environment,” reducing inflation, and cutting U.S. debt. It’s good that he’s excited: these are arduous and unenviable tasks already, along with whatever Trump will throw his way.

So, who is Scott Bessent, and why is the market excited about him?

First, the stock market likes certainty. Just the nomination alone does something to satisfy markets, but Bessent is also considered more moderate versus some other names that were in the mix. He’s had a long career on Wall Street as a hedge fund manager, previously working for George Soros from 1991-2000, even helping to lead the team that famously bet on the Black Wednesday collapse of the British pound in 1992.

After leaving Soros Fund Management, he started a $1B hedge fund that closed up shop five years later in 2005. Heading back to SFM a few years later, he was Chief Investment Officer between 2011-2015 after Soros retired, and then left again to found another hedge fund, Key Square Group, with a $2 billion investment from George Soros. Business Insider wrote that “some consider [Bessent] Soros’ protégé.”

This alone might make him a surprising pick for Trump. However, Bessent was a major donor to the 2024 Trump campaign, as well as being an economic advisor. Trump has called him “a nice looking guy and one of the most brilliant men on Wall Street.”

Since its creation in 2016, Key Square Capital has had its ups and downs, with Reuters reporting that “billions” left the firm as it lost money in 2017, 2018, 2020, and 2021. However, the last three years have seen double-digit gains, spurred by a bet on Trump’s re-election.

Bessent believes philosophy and psychology are key to understanding the markets: in an interview with Yale Alumni Magazine in 2015, he said the “main thing now in markets is to be able to analyze data and behavior.” This speaks to a picture of an even-handed, analytical man with a strong sense of judgment: in the same interview, he also says that the biggest takeaway from his first hedge fund was “I shouldn’t change my style or the construct of my firm because of investor preferences.”

As we learned from the previous Trump administration, the ability to stand one’s ground is key for cabinet members. Jerome Powell is a perfect example; despite obvious disfavor, he stayed firm in his job and has guided the markets through the pandemic to a soft landing.

Business Insider writes about a 2017 presentation from Key Square as another way to look into Bessent’s process. The presentation said it “views its research process as a think tank that is bolted on to disciplined trading and risk management,” emphasizing the team’s education, “voracious” reading, and frequent outside consultants and experts from many different fields.

Forbes quotes several people close to him describing Bessent as “even-keeled”, “tough,” and possessing “the ability to walk away from [a deal]” more than a year in the making if the facts changed. An analyst who worked for him called him a “student of Stan Druckenmiller,” who “likes to take big bets with limited downside.”

Bringing all this experience into the White House, Forbes writes that Bessent is concerned about government spending, potentially tying into Elon Musk’s DOGE department. “We have these budget deficits we’ve never seen before when we’re not in a recession or a war.” Despite the worries, Bessent is bullish on the U.S.: on Fox News this month, before winning the nomination, he predicted a boom during Trump’s next term. “We can bring back the manufacturing. We can have energy dominance. And we’re going to have this technology boom.”

For the previously mentioned op-ed in the Wall Street Journal, he wrote that markets have made an “unambiguous embrace of the Trump 2.0 economic vision.” He added that markets are “signaling expectations of higher growth, lower volatility and inflation, and a revitalized economy for all Americans.” He pushed even further: “Mr. Trump will deliver a renaissance in American energy investment and ensure that trade is free and fair.”

He has also already proven his mettle, pushing back on economists, including Nobel Laureates, who have said that Trump’s economic agenda will hurt the U.S., [“Let’s hope none of them adjusted their retirement portfolios”] with policies like tariffs raising prices for consumers. The Financial Times quotes him describing Trump as “a free trader”, with tariffs as a negotiating strategy rather than set in stone.

In the WSJ op-ed, he seems pleased with the higher U.S. dollar, despite its strength hampering U.S. exports. He calls for “the private sector rather than the government to allocate capital,” saying it is crucial for economic growth.

In conclusion, Bessent is someone who (per Forbes) is “well respected, both in the trading community and the policy community.” A man who likes to learn and is interested in multiple disciplines, he is ready to push the America First policies of the next Trump administration, but the market believes he has the backbone to balance whatever wild policy swings come his way. Despite Trump’s announcement of massive tariffs this week on Truth Social, the market has remained relatively calm. However, only experience can show us what a man is made of: it’ll be an interesting four years.

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