Wall Street Hoped Scott Bessent Would Keep Trump In Check. He Had Other Ideas.

Treasury Secretary Scott Bessent, a successful hedge fund manager straight out of central casting, has quickly become one of the administration's strongest advocates for policies that are upending global trade and roiling financial markets.

The deliberate, wonkish Wall Street veteran who once called for the gradual implementation of new trade barriers has transformed into a bullhorn for President Donald Trump’s MAGA 2.0 agenda, making it clear that short-term market reactions are secondary to administration priorities such as sweeping tariffs.

As financial markets suffered the most precipitous drop in years this week, Bessent went on television earlier this month and argued that the U.S. needs to “detox” itself off government spending. And he raised eyebrows in a recent speech by declaring that “access to cheap goods is not the essence of the American Dream.” He also said he was “less concerned” about the short-term economic impact of tariffs.

When pressed on a recent market sell-off that pushed down the S&P 500 by more than 10 percent from its recent peak, he said that "corrections are healthy."

"What's not healthy is straight up, that you get these euphoric markets. That's how you get a financial crisis," he said during an appearance on NBC's "Meet the Press" on Sunday. "I'm not worried about the markets. Over the long term, if we put good tax policy in place, deregulation and energy security, the markets will do great."

This wasn't what many on Wall Street expected.

“He definitely has not played the role to date that the markets had expected,” said Sarah Bianchi, a senior managing director at investment bank advisory firm Evercore ISI. “It’s always hard for anyone to figure out when and how to go to the president and say you need a big course correction — and it’s particularly hard in Trump 2.0.”

Bessent’s muted reassurances to financial markets shows there may be no one in the administration willing to stand in the way of Trump’s emboldened mandate for reshaping U.S. economic policy. Stock market convulsions, along with the advice of conventional economic policymakers like Trump’s first Treasury secretary, Steven Mnuchin, helped temper the president’s protectionist and potentially calamitous priorities during his previous stint in the White House.

Now, “whatever the guard rails that were in place the first administration no longer exist,” said one former Trump administration official, who was granted anonymity to speak candidly.

Wall Street’s initial favorable reaction to Bessent, a George Soros protégé who had little track record in Republican politics before joining Trump’s circle, may have misread his fervor for the president’s agenda.

Exante Data founder Jens Nordvig, who has known Bessent for more than a decade, said the Treasury secretary is deeply interested in geopolitics, with a particular interest in containing China.

Bessent is not as protectionist as his boss — “I think he’s very well aware that there’s some serious economic costs to raising tariffs dramatically,” Nordvig said — but that doesn’t necessarily translate to the same kind of resistance to duties that characterized Mnuchin’s tenure.

The administration’s early agenda has been dominated by seismic announcements affecting trade with China, Canada and Mexico — efforts driven largely by the White House, Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer. The rivalry, if not overt tension, between Bessent and Lutnick is an open secret — the two competed for Trump’s nod to lead Treasury. A person familiar with the dynamics around Bessent, who was granted anonymity to speak freely, said the Treasury secretary has had to “walk carefully” as Trump, White House trade adviser Peter Navarro and Lutnick have pushed the tariff agenda.

“He’s got to be careful so that he’s not a negative Nancy,” the person said, comparing the dynamics between Bessent and Lutnick to a “Brazilian knife fight with the lights out.”

A Treasury spokesperson said the secretary “stands in complete support of President Trump’s agenda to restore our economy and make life more affordable for Americans of all backgrounds.”

“He is working tirelessly to enact this mandate on behalf of the President, and ensure that Main Street and Wall Street both reap the benefits of President Trump’s winning economic agenda,” the spokesperson said in a statement.

Bessent recently acknowledged that “there’s going to be a natural adjustment as we move away from public spending to private spending.”

“The bottom 50 percent of working Americans have gotten killed. We are trying to address that,” he said during an appearance on CNBC. “Could we be seeing that this economy that we inherited is starting to roll a bit? Sure.”

Bessent’s public message — that long-term economic gain won’t occur without some short-term pain — has stayed consistent despite Wall Street looking for some reassurance.

“It’s very clear to people now that this is not someone who is simply channeling the voice of markets. This is someone who has a very different view of the world,” said Josh Lipsky, the senior director of the Atlantic Council's GeoEconomics Center. The views Bessent has espoused since becoming Treasury secretary affirm that “many things are broken, and therefore, if the policy solutions seem extreme, it's only because they are addressing what they perceive as a broken system,” Lipsky added.

While most economists still believe the economy will expand this year, there are troubling signs that the new administration’s slash-and-burn policies could hamper growth. Big bank economists say there is now a greater likelihood of stagflation — or a recession — and top CEOs polled by the Business Roundtable said they are downshifting plans for future hiring and investment. In an appearance on Fox Business on Wednesday, Goldman Sachs CEO David Solomon said policy uncertainty is slowing dealmaking and keeping investors on the sideline.

Bessent has pointed to a recent decline in long-term borrowing costs linked to 10-year Treasury securities and lower gasoline prices as signs that Trump’s agenda has benefited the U.S. economy. But he’s also said that the new administration’s policies will fundamentally shift the economy away from government spending and that there will be an adjustment period.

“There is no doubt that Trump has had a big impact on his thinking on the economy,” said Stephen Moore, a former Trump adviser and senior visiting fellow at the Heritage Foundation, adding that he’s been impressed by Bessent’s adroit ability to avoid landmines in media appearances that would irritate Trump. On policy, “he’s become more Trumpian in how he thinks about how these policies impact blue-collar, middle-class America.”

Victoria Guida and Declan Harty contributed to this report.