Trump Taps Hedge Fund Mogul for Treasury Secretary

Trump Taps Hedge Fund Mogul for Treasury Secretary

Bessent at a Trump event this summer
Reuters
By Yuval Rosenberg and Michael Rainey
Friday, November 22, 2024

Happy Friday and a happy birthday to director Terry Gilliam of Monty Python fame, who turns 84 today; Tina Weymouth of the Talking Heads, who turns 74; and to Scarlett Johansson, who turns 40. Here’s what’s happening.

Trump Taps Hedge Fund Mogul Scott Bessent for Treasury Secretary

President-elect Donald Trump has chosen billionaire hedge fund manager Scott Bessent to be his Treasury secretary.

The 62-year-old Bessent has become a key economic adviser to Trump, who regularly touted his support on the campaign trail. Bessent “has defended Trump’s economic proposals in the midst of opposition from some on Wall Street, who worry that the president-elect’s pledge to impose sweeping tariffs will trigger trade wars and ultimately lead to higher prices for American consumers,” The Wall Street Journal notes.

Bessent was a leading early contender for the Treasury job, but some Trump allies advocated for other candidates, and the president-elect reportedly considered several candidates, including former Federal Reserve Governor Kevin Warsh, Tennessee Sen. Bill Hagerty and Marc Rowan, a private equity billionaire.

National Debt Tops $36 Trillion

On Thursday, the gross U.S. national debt surpassed $36 trillion for the first time, according to data from the Treasury Department. Debt held by the public — a subset of the gross national debt that excludes debt the government owes to itself — has also been rising to record highs, and now exceeds $28 billion.

The milestones arrive just four months after the gross debt hit $35 trillion for the first time. The debt is expected to increase by trillions of dollars at a fairly rapid clip for the foreseeable future unless lawmakers act to change course.

“We started 2024 by crossing the $34 trillion threshold, added another trillion during the summer, and now we’re heading into the holidays with yet another trillion,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a nonpartisan group that advocates for debt and deficit reduction. “Government borrowing is becoming as certain as the changing of the seasons these days.”

MacGuineas noted that interest payments on the debt are now the fastest growing part of the budget and are projected to cost roughly $13 trillion over the next decade.

Trump’s Proposed Tariffs May Already Be Affecting the Economy

Economists have warned that President-elect Donald Trump’s proposed tariffs would raise prices for consumers and reignite inflation. Fears of those tariff may already be affecting the economy — by providing a near-term boost as companies stock up to avoid higher prices down the line.

“Some companies are pushing through orders sooner to try to beat the clock on the expected harsher trade regime — the type of activity that, if widespread enough, could temporarily jolt GDP,” Courtenay Brown reports at Axios, adding that companies are importing goods at a historic rate to get ahead of Trump’s second term in office.

Joe Brusuelas, chief economist at accounting firm RSM, tells Axios that companies may be pulling inventory orders forward to the tune of a 0.2 percentage point increase this quarter — and a decrease later on.

Over the longer term, analysts at the Peterson Institute for International Economics have warned that Trump’s policies would cost the typical American household more than $2,600 a year and raise inflation to between 6% and 9.3% by 2026. “By 2028, US consumer prices generally are between 20 and 28 percent higher,” PIIE researchers wrote this fall. “The inflation rate settles at 2 percentage points above baseline, or almost 4 percent, from 2034 through 2040.”

Among the potential price hikes: Grocery bills could climb by $185 a year, or 3.3%, according to one recent analysis. And the cost of generic drugs could rise, Berkeley Lovelace Jr. and Sara G. Miller report at NBC News. They note that relatively few generic drugs are made in the United States, but generics account for some 90% of all prescriptions filled. Dr. Janet Woodcock, a former acting commissioner of the Food and Drug Administration, tells NBC News that unless Trump grants an exemption for generic drugs, they are likely to get more expensive, with the increased costs pass along to patients — or drugmakers could be forced out of the U.S. market.

“I thought tariffs were to help domestic industry thrive and level the playing field,” Woodcock said. “But if there’s no domestic industry, what are you doing? You’re just passing higher costs on to the consumers.

Still, economists surveyed by Reuters this month project that the incoming Trump administration could quickly impose tariffs on China — though not necessarily the blanket 60% tariffs on Chinese goods that Trump floated on the campaign trail. “A poll of more than 50 economists by Reuters from Nov. 13-20 showed a strong majority, both in and outside mainland China, expects Trump to impose the tariffs by early next year, with a median estimate of 38% and projections ranging from 15% to 60%,” Reuters’ Vivek Mishra and Kevin Yao reported this week.

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