President-elect Donald Trump’s choice for Treasury Secretary markedly differs from some of his more contentious and debatable Cabinet nominees announced to date. Scott Bessent is poised to maintain calm within Wall Street, the sector he is set to oversee.

The role of Treasury Secretary demands a serious and capable individual who can handle immediate deadlines and the pressures exerted by global financial markets. In many ways, the Treasury Secretary acts as the quarterback of the nation’s economy.

Opting for a radical nominee could have unsettled investors and introduced additional risks to Trump’s already intricate economic plans.

Wall Street remained indifferent to the appointment, with some even praising the decision.

“Scott Bessent is widely regarded by many analysts as one of the most respected and competent candidates,” stated Judge Glock, a senior fellow at the Manhattan Institute. “He has preserved his connections with traditional business and financial circles as well as with Trump loyalists.”

In other words, Trump chose not to select a figure like Matt Gaetz or Robert F. Kennedy, Jr., to lead the Treasury.

However, this does not imply that Bessent will oppose Trump’s policies, including increased tariffs across the board, significant tax cuts, or the large-scale deportation of undocumented immigrants. Bessent, a relatively recent supporter of the MAGA movement, founded the hedge fund Key Square and previously served as the chief investment officer for Soros Fund Management. Last week, he authored an op-ed on Fox News endorsing Trump’s policies.

Nonetheless, Glock emphasized that Bessent would provide steady leadership for the economy.

“Regarding the most contentious issue between Trump and traditional business leaders—tariffs—Bessent has emphasized the role of tariffs as a tool to secure better deals with trading partners, a concept with a long and bipartisan history,” Glock noted.

One of the responsibilities of the Treasury Secretary is to ensure that Wall Street remains calm and confident during periods of economic or market instability. In other words, to prevent minor issues from escalating into widespread panic. This capability is why Bessent was widely seen as the leading candidate for the position before his appointment.

Certain members of Trump’s inner circle, including Elon Musk, publicly supported a more disruptive figure for the role—specifically Cantor Fitzgerald CEO Howard Lutnick, whom Musk claimed “will actually enact change,” unlike Bessent, who would represent “business as usual.” Ultimately, Lutnick was appointed as Commerce Secretary, a significant yet less critical position for making pivotal market decisions.

A composed demeanor, a crucial attribute for a successful Treasury Secretary, likely influenced Trump’s final decision to select Bessent.

“I don’t believe there is a significant difference in tariff policy outcomes between Bessent and Lutnick,” stated Isaac Boltansky, BTIG Director of Policy Research. “However, differences in temperament and experience will be important when the next Treasury Secretary communicates with the public, lawmakers, and foreign officials.”

Bessent’s selection demonstrates that certain constraints on Trump remain, particularly regarding Wall Street and the management of the nation’s finances.

“Scott possesses a superior understanding of markets, economics, people, and geopolitics compared to anyone I’ve interacted with,” declared Kyle Bass, a billionaire hedge fund investor at Hayman Capital Management, in a recent X post.

Markets as Guardrails

During his first term, Trump closely monitored market movements, viewing the Dow Jones Industrial Average as a real-time indicator of his success. Unlike his predecessors, Trump frequently tweeted about even the most minor market milestones, departing from the typically hands-off approach.

Consequently, Bessent will be responsible for implementing policies that align with the president-elect’s agenda while sustaining the market’s growth.

This task may prove challenging. During Trump’s initial trade war with China, markets experienced multiple downturns partly due to concerns over his trade policies.

For example, in December 2018, markets were volatile amid fears of the US-China trade conflict. This turbulence prompted Trump to seek a deal with Chinese President Xi Jinping during a high-stakes meeting in Argentina, as reported by CNN. When markets did not recover, Trump expressed anxiety over falling stocks and the potential political repercussions of these losses.

A similar scenario could unfold in 2025 as Trump has pledged to impose 60% tariffs on China, a major US trading partner and a key source of supplies and components for American businesses.

Economists have cautioned that Trump’s tariffs on China and proposed 10% to 20% tariffs on all US imports could drive inflation.

A comparable situation might arise if investors and CEOs become apprehensive about Trump’s plans to deport millions of undocumented workers—a move that could also contribute to rising inflation.

Investors might also respond negatively if Trump attempts to replace Federal Reserve Chair Jerome Powell, with whom he has had a complex and sometimes contentious relationship. The Treasury Secretary collaborates closely with both the central bank and the White House.