What does America’s next treasury secretary believe?

TO HEAR DONALDCIACNBCUS Trump’s describe it, everyone wants to work for him. Howard Lutnick, the boss of Cantor Fitzgerald, an investment firm, and a co-head of the recruitment crew, has bragged that he is in touch with “the top 150 businesspeople across the United States of America”. A vast array of names have been bandied about for all kinds of roles, including treasury secretary—from Jamie Dimon, boss of JPMorgan Chase, a bank (who has repeatedly clarified he has no interest in the job), to Jay Clayton, who ran the Securities and Exchange Commission during Mr Trump’s first term (but is apparently more interested in running the this time) and Steven Mnuchin (who did the job last time but does not want it back).From this milieu, however, clear frontrunners have emerged. With the caveat that the market is relatively thin—only around $250,000 has been wagered on the question on Polymarket, America’s largest prediction market—bettors have given serious chances to four possible choices in recent days: three Wall Street types who favour a broad mix of pro-business, , and a wildcard more firmly focused on crushing inbound trade. As we wrote this, three of the four remained in the race. Who among them ends up being picked—if any—will say much about Mr Trump’s second-term .Speculators are giving by far the best chance to Scott Bessent, who runs Key Square Capital, a hedge fund (see chart). His odds of winning have soared to around 90% since it was revealed he was hobnobbing with Mr Trump at Mar-a-Lago over the weekend. Key advisers are backing him for the post; on November 10th he published an op-ed in the outlining why he thinks Mr Trump’s agenda will turbocharge the economy. The other Wall Street grandee still in the mix is Mr Lutnik himself; John Paulson, a hedge-fund titan who made $5bn betting on the housing crash in 2008 and whom Mr Trump name-checked in January as a possible pick, said on November 12th that he would drop out of the race.Mr Bessent and Mr Lutnick, at a glance, have much in common. Both have lived in New York City for most of their professional lives. Both have become billionaires through success in high finance. And both have backed Mr Trump’s campaign heavily, either through hosting fundraising events or donations of their own. In interviews or op-eds in recent weeks both have called for a mix of deregulation, lower taxes and tariffs.The wildcard choice would be Robert Lighthizer. He was the architect of Mr Trump’s tariffs during his first term and is a vociferous advocate of more intervention on trade. In an opinion piece for in March he argued that a blanket 10% tariff on imported goods would create “high-paying industrial jobs”. In the days after Mr Trump’s election Mr Lighthizer, a former Wall Street lawyer who was America’s trade representative in the first Trump administration, was thought to have a shot—but his odds lengthened after the , citing people close to the transition team, reported that he had been offered the same role again. (Soon after, however, insiders told several media outlets that this was either nonsense or an attempt to remove him from contention for the Treasury role.) Choosing him would reveal that trade policy is Mr Trump’s main priority—and might cause investors to rethink their enthusiasm for Trumponomics.Still, the leaks (and the markets) are pointing most clearly at Mr Bessent as the pick. What agenda might the Treasury pursue under his stewardship? In interviews he projects the kind of obsequious loyalty Mr Trump enjoys—he told “I’m going to do whatever Donald Trump asks”—and signals he favours policies Mr Trump fetishises, such as slashing taxes and red tape. But there are areas where he and the president-elect might differ. In particular, Mr Bessent appears to care deeply about containing debt: he characterised the big deficits and state subsidies of the Biden era as a “return to central planning” in a speech in June. His plan to bring the deficit down would almost certainly include gutting the green subsidies in the Inflation Reduction Act, a law enacted in 2022 that he has described as a budgetary “doomsday machine”.Mr Bessent has also characterised the maximalist tariffs Mr Trump promised on the campaign trail as more of a negotiating position than a real policy. And he seems less inclined to try to mess with the dollar than Mr Trump, who has often bemoaned the currency’s strength and appears keen to push its value down. On November 10th Mr Bessent wrote that the greenback’s bounce since the election is “a vote of confidence in leadership”. That he believes in market exchange rates should not come as a surprise. It would be ironic if a former protégé of George Soros, the financier known for “breaking the Bank of England” with big short bets against the pound, could be convinced that the state should be the one setting exchange rates.Yet Mr Bessent is not entirely a man of more sensible impulses than Mr Trump. In the past, Mr Trump has described his decision to pick Jerome Powell, the current chairman of the Federal Reserve, as the “worst mistake” of his presidency. But sacking him before his term ends in 2026 might be legally impossible, and trying to do so could be an embarrassing failure. As a result, Mr Bessent has laid out an alternative plan: appointing Mr Powell’s successor perhaps a year in advance of the end of his term, with the chair-in-waiting offering alternative forward guidance on policy. It is just the type of gambit—craftily disdainful of norms and propriety—that might have helped him woo Mr Trump.