Scott Bessent, a millionaire from a hedge fund, was named by President-elect Donald Trump as his nominee for the position of Treasury Secretary. If approved by the Senate, Bessent will oversee the country’s finances and play a key role in carrying out Trump’s economic agenda. Additionally, he will be the first Treasury Secretary in a Republican administration to be openly gay.

Scott Bessent, a billionaire, was named President-elect Donald Trump’s pick for the position of Treasury Secretary on Friday.In a statement announcing Bessent as his choice for the top financial position, Trump said, “Scott has long been a strong advocate of the America First Agenda…he will help me usher in a new Golden Age for the United States, as we fortify our position as the World’s leading Economy, Center of Innovation and Entrepreneurialism, Destination for Capital.”

Despite having no prior experience in government, Bessent will be crucial to carrying out Trump’s economic agenda if the Senate approves his appointment. This entails negotiating significant tax cuts, promoting protective tariffs, and addressing the rapidly growing debt of the largest economy in the world.

Who is Scott Bessent, then? What challenges will he face in this position? Let’s have a look.

Five facts about Scott Bessent

1. He has experience with hedge funds: Bessent, a former chief investment officer of Soros Fund Management, played a significant part in Soros’ investment activities in London.

He was instrumental in the well-known 1992 wager against the pound, which paid off handsomely on “Black Wednesday,” the day the pound was separated from other European currencies.

According to S&P Capital IQ, he is currently the CEO and Chief Investment Officer of Key Square Capital Management, a hedge fund based in New York. The 62-year-old has also given lectures at Yale University about the history of hedge funds and economic booms and busts in the 20th century.

2. He was a Democrat donor: Bessent had contributed to a number of Democratic groups before to joining the Trump team as an adviser and donor.

He organized a fundraiser for the Democratic National Committee in the early 2000s in favor of Democratic Vice President Al Gore’s presidential campaign. Additionally, he has backed well-liked Democratic leaders like Barack Obama and Hillary Clinton.

3. An outspoken supporter of cryptocurrency: Bessent has publicly endorsed Trump’s position on the cryptocurrency sector.

“The crypto economy is here to stay, and cryptocurrency is about freedom,” Bessent stated in a July interview with Fox Business.

The Wall Street financier’s more accommodative attitude can help cryptocurrencies like Bitcoin maintain their upward trend.

4. He would be the first openly gay Treasury Secretary: According to AP, Bessent would be the first Senate-confirmed member of the LGTBQ Cabinet in a Republican administration and the first out gay Treasury Secretary if confirmed by the Senate.

Bessent has two kids and resides in South Carolina with his husband, John Freeman, a former prosecutor in New York City.

5. He disregarded the opinions of economists who had won Nobel Prizes: Bessent initially caused a stir when he disregarded the opinions of sixteen economists who had won Nobel Prizes, who predicted that Trump’s proposals to impose extensive tariffs would result in inflation and price increases.

He wrote for Fox News that “tax critics contend that tariffs will raise the prices Americans pay for imported goods.” However, the evidence contradicts this. Although it was once anticipated that President Trump’s first-term tariffs would cause inflation, the cost of the impacted goods did not increase.

Difficulties for Bessent

If Bessent takes on the role, he will encounter the following difficulties.

Trade and tariff balance
“How to navigate a desire for more protectionism while avoiding a global trade war” will be one of Bessent’s biggest challenges, according to Gregory Daco, chief economist at EY.

Trump has promised higher levies on China and universal taxes of at least 10% on all imports, but it is unclear how he will carry out his promises.

In order to prevent inflationary pressures, his Treasury secretary would probably need to make sure that trade laws “permit a negotiation between trading partners without doing excessive damage to the economy,” Daco told AFP.

Whether the candidate is a “cheerleader and defender” of Trump’s tariffs or a “moderating force” in contrast to more assertive supporters is a crucial question, according to David Wessel, a senior fellow in economic studies at Brookings.

Handling the drama of the debt ceiling
While negotiating to raise the debt ceiling, the US Treasury must make sure the nation keeps paying its payments.

In recent years, the debt ceiling—a cap on government borrowing to pay for already-incurred expenses—has grown to be a very divisive topic, frequently fueled by ideological differences.

Technically, the limit suspension ends in January, and departing Treasury Secretary Janet Yellen will probably take the first steps to prevent the nation from slipping into default.

Such actions will need to be continued by the incoming administration.

Analysts predict that the debt ceiling will be lifted because Republicans control both the White House and Congress.

However, Wessel noted that the Treasury chief will be crucial in negotiating the tradeoffs because certain politicians might expect concessions for doing so.

According to Shai Akabas, executive director of the Bipartisan Policy Center’s economic policy program, “this will be the first time in the modern history of the debt limit that there will be a change in administration during a debt limit episode.”

Tax reductions

Wessel pointed out that Trump’s administration will probably begin implementing tax breaks and expenditure reductions with his budget, which is scheduled to be unveiled in early 2025.

Given that economic discontent played a significant role in the election’s outcome, the Treasury secretary is expected to place a high priority on tax cut extensions.

However, implementing programs while keeping the US economy on a sustainable debt trajectory is a difficulty.

“It will be a very delicate job,” Daco stated. “During the campaign, every item on the menu has been ordered.”

These include lowering company and household taxes, lowering tip taxes, and possibly increasing energy expenditures.

Management of Debt

The Committee for a Responsible Federal Budget believes that Trump’s plan might increase the national debt by about $8 trillion.

According to Akabas, the public’s debt is currently $28.6 trillion, or almost 100% of GDP, and it is increasing at an unsustainable rate.

“The Treasury secretary may have to face the harmful effects of the debt load if we can’t find a way to stop digging,” he continued.

These repercussions can include higher interest rates on consumer debt or US debt.

He cautioned that the nation might possibly experience negative reactions in financial markets or downgrades from credit rating agencies.

“This could negatively impact our future growth and undermine international trust in the United States as an economic leader,” he continued.

With assistance from agencies