On November 22, President-elect Donald Trump announced his selection of billionaire Scott Bessent as Treasury Secretary. Immediately after the announcement, global financial markets reacted enthusiastically, with currencies rising in value. The market hoped that the founder of hedge fund Key Square Group would mitigate the negative impact of Mr. Trump's extreme economic views.

Billionaire Scott Bessent. (Source: NPR)

Following the news, the US dollar fell 0.8% to 106.69 against a basket of six major currencies, reducing the gains from the currency after maintaining a continuous upward trend since late September 2024. The euro gained the most, rising nearly 1%. The euro, the Japanese yen, the British pound and other southern hemisphere currencies all rose against the greenback.

Mr. Bessent, born in 1962, had little presence in Mr. Trump’s first administration and little government experience. But hedge fund CEO Scott Bessent has emerged over the past year as a trusted adviser who can interpret Mr. Trump’s populist trade policies in a way that is palatable to Wall Street and financial markets.

If confirmed by the Senate, Mr. Bessent would be the 47th US President's most important economic official, expected to play a key role in overseeing a broad portfolio, including international trade, taxes, financial regulation and US sanctions.

Wall Street has been closely watching the President-elect's nominee, especially as he looks to reshape global trade through tariffs.

Strategists say Mr Bessent is “a credible choice”, a well-known figure in financial markets and a more moderate candidate than others.

Analysts also predict that the choice of Treasury Secretary may encourage Mr. Trump to consider a softer tariff policy, withdrawing harsh regulations to boost US economic growth and achieve the goal of reducing the budget deficit.

“Mr. Trump’s choice for Treasury Secretary has helped investors become more optimistic and stocks on Wall Street seem ready for a new rally,” said Susannah Streeter, Head of Finance and Markets at Hargreaves Lansdown, a financial services company in the UK.

Susannah also believes the hedge fund manager's long career in navigating market volatility will give investors confidence about upcoming corporate policies and raise expectations of achieving tariff targets without increasing natural inflation.

Analysts at Rabobank said the news that Scott Bessent is the top choice for Treasury Secretary increases the possibility of a softening of “Trump-style trade.”

The founder of the Key Square Group fund is also known to support the 3-3-3 target, which calls for a deficit reduction of 3% by 2028, 3% economic growth and 3 million new barrels of oil per day.

However, Tesla CEO Elon Musk expressed his disapproval of the investor Bessent becoming the new finance minister. Mr. Elon Musk said that choosing Mr. Bessent was a "traditional" choice.