Trump's Treasury pick The Senate will question Bessent on trade, taxation, and deficits.

CNN, Washington, D.C. Hedge fund manager Scott Bessent, president-elect Donald Trump's choice for Treasury secretary, pledged to keep the dollar as the global reserve currency as he readied himself to answer questions from U.S. senators on Thursday about how he will carry out Trump's promises for tax cuts, tariffs, and deregulation.

Financial markets will be on edge as Bessent testifies at a Senate Finance Committee confirmation hearing at 10:30 a.m. EST (1530 GMT) due to concerns that Trump's policy plans could fuel inflation and ignite a new global trade war that jeopardizes financial stability. These concerns are reflected in rising bond yields.

According to David Wessel, director of the Hutchins Center for Fiscal and Monetary Policy at the Brookings Institution, the 62-year-old founder of Key Square Capital Management will have to portray himself as a balancing force on Trump's "more extreme" policies.

"What the markets and the business community want is to know that there's a grown-up at the table who doesn't think that cutting taxes excessively and running up the debt is a good idea," Wessel stated. "And someone who doesn't think that all of Trump's tariff campaign promises are good ideas."

Bessent outlined a plan for "a new economic golden age" in prepared remarks made public on Wednesday night. The plan called for permanentizing Trump's 2017 individual and small business tax cuts, which are set to expire on December 31, 2025, and giving priority to strategic investments that boost the American economy.

"We must secure supply chains that are vulnerable to strategic competitors, and we must carefully deploy sanctions as part of a whole-of-government approach to address our national security requirements," Bessent continued in his speech.

"Your expertise has been in making already-rich investors even richer, not cutting costs for families or making the economy stronger for all Americans," Warren stated in her letter to Bessent.


Republican Mike Crapo, who chairs the Senate subcommittee, referred to Bessent as "one of the sharpest minds in the global finance industry."

In his prepared remarks, Crapo also stated that Bessent will "have to work with Congress to preserve and build on pro-growth Republican tax policies that have greatly benefited all Americans."

QUESTIONS OF FED INDEPENDENCE

After attending Yale University and growing up in South Carolina, Bessent began working on Wall Street, where in 1992 he assisted renowned investor George Soros in making almost $1 billion by placing a wager against the British pound.

When he founded Key Square in 2015, he immediately raised $4.5 billion in assets, which decreased to $477 million six years later after reaching a peak of $5.1 billion at the end of 2017. In order to prevent conflicts of interest, Bessent has promised to sell his Key Square holdings.

Given his prior support for designating a "shadow" chair to the Fed board who would provide alternative policy guidance, markets will also interpret Bessent's remarks regarding the independence of the Federal Reserve. Even though the Fed dropped interest rates three times last year, Trump has recently complained that they are too high.