November 14, 2024 • 18 mins
Over the last week, President-elect Donald Trump has announced his nominees for the top jobs in his administration. But one key position that hasn’t been filled yet is Treasury secretary, and the person Trump picks will play a crucial role in shaping US economic policy.
Senior Washington correspondent and host Saleha Mohsin joins David Gura to tick through the top candidates under consideration and how each might shape the Treasury’s priorities if chosen and confirmed.
Read more: Bessent Hails Trump Agenda as Candidates Vie for Treasury Post
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:03):
Bloomberg Audio Studios, podcasts, radio News. It's been just over
a week since Donald Trump was reelected, and he hasn't
wasted any time putting together his cabinet. Trump is expected
to name Rubio as Secretary of Stadium Matt Gates nominated
by President like Donald Trump as his attorney General. Representative
(00:23):
Mike Woltz is in line to be National Security Advised.
One of the Bloomberg reporters tracking who Trump is picking
for his cabinet is our very own Seleia Mosen.
Speaker 2 (00:33):
During the first Trump term, I covered the Treasure Department,
so that's Steven Mnushan for all four years.
Speaker 1 (00:39):
Seleia is keeping her eyes on Treasury this time around
because the person Trump nominates for that job would play
a major role in shaping economic policy, and we are
still waiting for Trump to tell us who he's picked.
Speaker 2 (00:51):
We've seen a slew of announcements come through for posts
all the way down to who is going to be
the ambassador to Israel, but we have not heard some
of the key economic policy picks that are going to
make a very big difference to Bloomberg readers, to traders,
but also just to the average American. And their costs
of living.
Speaker 1 (01:13):
This is the Big Take DC podcast from Bloomberg News.
I'm David Gura. Today on the show Seleia and I
look at who Donald Trump has tapped to lead his
new administration and what those picks tell us about his
priorities Slay. It seems like this cabinet is coming together
pretty quickly? Am I right in my perception of that?
(01:36):
Are we getting these names, these nominations and appointments pretty fast?
Speaker 2 (01:39):
They are coming quickly. They're coming in an order that
we didn't really expect. Usually we see the White House
Chief of Staff come out first, which it did happen
this time. Susie Wilds was announced pretty quickly, but then
we're used to seeing Secretary of State and Treasury Secretary
announced very quickly after that.
Speaker 1 (01:55):
How different is the way this is playing out from
what we saw last time when he was elected back
in twenty sixteen.
Speaker 2 (02:00):
It's actually much more organized this time. Susie Wiles, who
was Trump's campaign manager and was credited for running a
very stable and almost leak free campaign, has become Chief
of staff for the White House and so now she
is running point on transition announcements and how Trump can
(02:22):
come to his decisions, as are having interviews and people
are coming through mar A Lago to talk about different priorities.
Where you're seeing things come out a little bit more methodically.
Speaker 1 (02:32):
You mentioned mar A Lago, the President's Club in South Florida.
What is the scene there like.
Speaker 2 (02:37):
It's a revolving door of people. Howard Lutnik, who is
in the running for treasure secretary, has been there for
more than a week now. Scott Bessant, who was also
in the running for treasure secretary, was down there recently.
We have Susie Wiles down there. Bob Leidheiser, who was
Trump's US trade representative during the first administration and now
is under consideration for a top you can policy job,
(03:00):
including Treasure secretary. He is also down there.
Speaker 1 (03:04):
You mentioned a minute ago, Susie Wiles, who was his
campaign co manager, Howard Lutnick, who's running this transition team.
To what degree are they influencing this process?
Speaker 2 (03:13):
That's a really interesting question. With Donald Trump, he makes
his own decisions. He likes to see a bit of
tension in the room. He likes to see different ideas
coming forth and see how his different advisors react to
different ideas. Trump is known to float names, get them
out into the media to see who it would be happy,
(03:33):
who would not be happy. I will say, when it
comes to the economic policy positions that we're watching the
most closely here at Bloomberg, especially treasure secretary, we expect
him to use his first term playbook and look for
a secretary with Wall Street chops.
Speaker 1 (03:50):
How much has that mattered to the President elect throughout
this process, having the backing of traditional Wall Street As
he makes this pick.
Speaker 2 (03:58):
It does sound like Trump someone with Wall Street pedigree
for the job, and most of the people that he's
looking at do have that in common. His first treasure secretary,
Steven Menusan, he lasted all four years, which was rare
in the first term for any cabinet officer to weather
all those storms that we saw from twenty seventeen to
twenty twenty one. And I think Trump did realize that
(04:21):
having stability in economic policy, making a treasure secretary who
can withstand the pressures of not just government but also
the unique features of serving under Trump, who has a
very different governing style, shooting from the hip. A lot
of policies made over social media. Sometimes it's like the
last advisor in the room is the one whose argument
(04:43):
kind of wins out those kinds of things. If it's
someone who can last through that and give markets and
Congress and international economic allies that kind of stability, I
think he is finding that that's a benefit. But at
the same time, there is a little bit of regret
that maybe Steven Mnushan was lukewarm on tariffs and served
(05:04):
as a bulwark to some of Trump's more surprising protectionist
economic proposals, and so this time he's coming back into
government not just on economic proposals but all across the board,
knowing that I want to make sure that the people
that I have on my cabinet who are implementing the
policies that I've been talking about for years now are
(05:25):
people who really do align with that vision and aren't
going to try to stop anything from happening.
Speaker 1 (05:30):
I wonder if there is an overarching theme to the
personnel choices that he's made so far. So we don't
have a full cabinet yet, but when you look at
who he has put forward, what ties them together?
Speaker 2 (05:40):
I would say fealty Trump learned in the first term
after having so much turnover and key jobs, especially in
the White House chief of staff role, especially in the
national security and foreign policy realm, and some of the
economic posts, not Treasure secretary, but you know, white House
National Economic Council director. Those jobs turned over so much.
(06:01):
People were fired via tweet, people left, they quit, they
were edged out or knifed out by each other. And
this time we are seeing that in fighting that was
a key feature of Trump one may not be a
feature in Trump two. It seems that he has less
tolerance for that kind of behavior.
Speaker 1 (06:22):
Coming up, we run through who Donald Trump is considering
to be his next Treasury secretary and what the different
candidates for the job could bring to the department. As
Donald Trump has put together his cabinet and picked senior
officials for his next term, there have been some surprises,
(06:45):
and of course that could happen again with his pick
for Treasury secretary. But Bloomberg Siliah Mosen says there are
four men who are considered front runners for the job.
Let's dig into that a little bit more. This is
your Bailey Wick. The position of Treasury Secretary, of course,
is a key job on or any administration. How important
is it to President Electrump?
Speaker 2 (07:04):
Oh? Incredibly important. He has a huge economic agenda ahead
of him. He is ringing forth protectionism, which is something
that our allies and adversaries around the world are nervously watching.
What kind of economic agenda does that mean if the
US is even more isolationist going forward. So he has
talked about ten percent tariffs across the board for pretty
(07:28):
much everyone, and a special sixty percent tariff rate maybe
for China. He's also talked about the dollar. It needs
to stay the world's reserve asset, but maybe it's also
too strong. And he's also talked about the Federal Reserve,
how a president should have a say in interest rates
and how the Fed manages the rate path, and which
economic policy advisors he chooses, whether it's enough people with
(07:51):
markets know how and who understand the plumbing of the
global financial system and can tell Trump what would market
react to in a positive way versus a negative way,
what could really wreak havoc in financial markets which would
cause Trump a lot of headaches. And also he doesn't
like that He likes to see market positive economic policies
(08:12):
going forth. Those are a couple of the things that
are at stake, and a lot of it comes down
to personnel.
Speaker 1 (08:18):
Let's start with Scott Besson hedge fund manager, somebody who
has been speaking out on behalf of the campaign, now
pretty vocal during the transition. What does he bring to
the table?
Speaker 2 (08:28):
So, Scott Bessant came into Trump's orbit only in the
past year to fifteen months. He has slowly won the
support of MAGA Republicans who are very close to Trump.
He has been out in the public on Bloomberg TV,
on other networks, writing op eds for different outlets, and
(08:49):
visiting journalists in their offices around Washington, boosting all of
Trump's economic policy proposals, which include tariffs, which include maybe
encroaching on the federal reserve a little bit. He's talked
about US China policy, He's talked about the dollar, He's
talked about financial regulation, all of the things that Trump
holds up as key pillars to his economic agenda. But
he's also emerged as a key advisor to Trump. Trump
(09:13):
has talked about Scott Bessett a lot in his rallies, saying,
you know, there's a great guy right there, Scott is
fantastic and Vasson also helped Trump write some of his
key economic policy speeches in the last few months, particularly
one at the Economics Club of New York, which came
with a lot of fresh news on what kind of
agenda Trump would have going forward.
Speaker 1 (09:35):
I know of him as a macro investor. What's his
reputation on Wall Street.
Speaker 2 (09:40):
He's known as someone who really understands global capital markets.
He's known as someone who is actively traded in markets
and can speak publicly about economic policy. He is a
little bit unknown in Washington, which is not unusual for
a Treasure secretary should he get the job. He has
not had a government job before, and so there is
(10:02):
some questions emerging about whether he is cut out to
deal with sort of the political thickets of Congress, having
to work with lawmakers in the House and the Senate
in both parties to do things like raise the debt ceiling,
you know, renew some of the tax cuts that are
going to expire next year. But he is known as
someone who markets see as their own person, which is
(10:25):
quite important for a treasure secretary because there are moments
during any kind of economic or financial crisis, large or small,
no matter where it's going on around the world, where
a treasure secretary has to lean on their personal credibility,
their personal gravita in order to calm markets and serve
as an emollient.
Speaker 1 (10:45):
Tell us if you would about Howard Lutnik.
Speaker 2 (10:47):
He has emerged this year as a really close advisor,
and like Bessett, he has raised millions of dollars for
the Trump campaign. He's also been a donor giving money
to Trump and also served as a bit of a surrogate,
but also hitting the airwaves, going out there boosting proposals,
touting policies, and then he became the co chair of
(11:08):
Trump's transition efforts. But he might be playing a little
bit of a you know, the Dick Cheney playbook, where
he has decided, I'm running transition efforts, and I'm also
going to see if i can get a job that
I want by putting my name in the ring. And
you know, the latest reporting from Bloomberg is that that's
something that is chafing Trump allies and key advisors. They
(11:30):
don't love that Lutnik is somewhat aggressively jockeying for a job,
specifically treasure secretary.
Speaker 1 (11:38):
We saw someone else who is reported to be in
the running, John Paulson, drop out of the race to
be Treasury secretary, citing the fact that his personal finance
is just too complicated. Is that a factor that's affecting
others that we're talking about.
Speaker 2 (11:50):
Here, Yeah, just like last time, that is a bit
of a pattern that these are very rich men who
are looking to come into the administration. There are ways
around that. If you are willing to give up the
idea of being a cabinet secretary, you can come in
as a special government employee, which is something that Elon
Musk is doing. Who's going to be heading up apparently
(12:11):
government efficiency, a newly created department, and so that means
you don't have to divest. But Treasury is unique. If
you are a treasure secretary, you have a hand in
public financing, so that's the almost thirty trillion dollar market
for treasuries that are out there. Also financial regulation, so
that affects banking stocks. You also oversee the IRS, and
(12:32):
you also oversee US currency policy, so the currency market
gets involved there. So you have you know, these secretaries
have to divest from a large amount of their investments.
So the problem, the key problem for John Paulson is
that he has an undisclosed and purportedly large investment in
Fanny May and Freddie Mack, which are two government owned
(12:54):
mortgage giants, and so any treasure secretary would also could
have a say in the future of those two vehicles.
And so we are seeing that someone like Lutnik, or
someone like Elon Musk or even John Paulson, they would
struggle to find a way out of all of those
investments and maybe even take a loss in certain cases
(13:15):
in order to take one of these jobs.
Speaker 1 (13:17):
So I guess one way you can ascertain who's in
the lead here is by how often the president elect
is named checking these individuals. You mentioned that he would
invoke Scott Besson's name. I was covering the campaign a
bit and heard him bring up Bob Litthheiser a lot.
As you said, he was the president elex former US
trade representative. What does he represent when you look at
(13:37):
sort of candidates for leading treasury.
Speaker 2 (13:39):
Yeah, so Lightheiser is a known China hawk. He has
already started creating plans for tariffs that would involve China
and the European Union. So if he ends up in
some kind of a position where he is not a
cabinet secretary but is able to oversee just the trade
policy portfolio, that means he wouldn't distracted by other parts
(14:01):
of let's say, Treasure secretary, which would include financial stability work,
debt management, economic sanctions, overseeing the Internal Revenue Service, things
like that. But he does want to manage trade policy.
He was pretty aggressive with tariffs the first round, and
Trump really admired the work that he did.
Speaker 1 (14:20):
Last time. I'll ask you about is Jay Clayton, the
former chair of this Curious and Exchange Commission, left that job,
joined Sullivan Cromwell, a white shoe law firm here in
New York.
Speaker 2 (14:30):
He's a little bit different than the other three candidates, right.
He is not, at his core a Wall Street guy.
He's worked on M and A deals, but as a lawyer,
not as an investor, hedge fund manager, or trader. Now,
one thing to remember is that with all of these candidates, yes,
all four of these names that we've just talked about
are in the running for a Treasure secretary, including Jay Clayton.
(14:50):
But each of these people could also fit into other
jobs in the Trump administration. You know, you also need
a National Economic Council Director. You also need someone to
run your Council of Economic Advisors. So we should just
bear in mind that some of the names that we're
talking about could end up in the administration, but not
necessarily Treasure secretary.
Speaker 1 (15:08):
I wanted to ask you how soon you think we'd
feel the imprint of this new Treasury secretary.
Speaker 2 (15:13):
Well, when it comes to markets, we're already seeing the
imprint of a Trump presidency in Donald Trump himself. I
think that as soon as a name is announced, we
should expect even just a brief blip in markets, particularly
if it is Bob Leithheiser. That is one thing that
I know investors that I've spoken to in the last
couple of months have said that they're really really wondering,
(15:34):
like kind of worried is it going to be Bob Leitheiser.
That's going to be a little bit more explosive for
the key policies and agenda items that investors tend to
be most concerned with. It just means that maybe a
little bit more aggressive decoupling between US and China and
more aggressive with allies in terms of tariffs and trade policy.
So we could see a market reaction in that, and
then there also might be a reaction when it comes
(15:57):
to the US dollar, which has moved around a lot
in the last couple of weeks, it's been very strong
under Donald Trump, just by way of Trump being elected,
and you know, Scott Bessett, just to talk about him
for a moment, he did say on Fox a couple
of days ago that the dollar loves Trump. So a
strong dollar is a reflection of approval for Trump. But
(16:18):
we could also then expect to hear some comments on
is this a secretary designate who is going to then
really work hard to implement weaker dollar policies that Trump
has often talked about. Beyond that, I think we're going
to find out I think soon what the first hundred
days or you know, Q one tasks are going to be.
(16:38):
In terms of economic policy, I think in terms of
like how quickly they can resolve any kind of debt
sealing standoff issues. But also tax policy is going to
be the first one that needs to be resolved by
the end of twenty twenty five, when Trump's tax cuts
from twenty seventeen some of them expire, and that's sort
of a first chance for Trump's economic policy team, probably
(16:59):
led by the Treasure Secretary, to have an impact on
American consumers. So those are sort of the key points
that we could see and imprint kind of quickly in markets,
which can eventually trickle down to the economy.
Speaker 1 (17:12):
When it comes to economic policy, how important is stability.
Speaker 2 (17:16):
It's hugely important. Markets want to know, they want predictability
and stability. They want to know where policy is headed.
You know, personnel is policy. So if they see that
there is personnel stability, that helps. Also when you have
things like you know, when COVID hit. At that time,
there was only one person on the economic policy team
and the Trump administration who had any kind of relationship
(17:39):
with Nancy Pelosi, who was then the House Speaker, and
that was Steven Mnusian. So Mnusian and Pelosi were able
to talk to each other, fine common ground and pass
a COVID relief bill, you know, a trillion dollar COVID
relief bill, rather quickly, when no one else in the
Trump administration wanted to talk to Pelosi. And so the
fact that those two were able to cultivate a relationship
(18:00):
comes from the fact that there was continuity in who
was running and overseeing economic policy.
Speaker 1 (18:05):
Sealia, thanks very much, happy to join. Thanks for listening
to the Big Take DC podcast from Bloomberg News. I'm
David Gura. This episode was produced by Julia Press. It
was mixed by Alex Segura and fact checked by Andreana Tapia.
Senior producer Naomi Shaven and Wendy Benjaminson edited the episode.
Wendy and Elizabeth Ponso provide editorial direction. Nicole Beamster bor
(18:29):
is our executive producer. Sage Bauman is Bloomberg's head of podcasts.
Please follow and review The Big Take DC wherever you
listen to podcasts. That helps new listeners find the show
Bloomberg Audio Studios, podcasts, radio News. It's been just over
a week since Donald Trump was reelected, and he hasn't
wasted any time putting together his cabinet. Trump is expected
to name Rubio as Secretary of Stadium Matt Gates nominated
by President like Donald Trump as his attorney General. Representative
(00:23):
Mike Woltz is in line to be National Security Advised.
One of the Bloomberg reporters tracking who Trump is picking
for his cabinet is our very own Seleia Mosen.
Speaker 2 (00:33):
During the first Trump term, I covered the Treasure Department,
so that's Steven Mnushan for all four years.
Speaker 1 (00:39):
Seleia is keeping her eyes on Treasury this time around
because the person Trump nominates for that job would play
a major role in shaping economic policy, and we are
still waiting for Trump to tell us who he's picked.
Speaker 2 (00:51):
We've seen a slew of announcements come through for posts
all the way down to who is going to be
the ambassador to Israel, but we have not heard some
of the key economic policy picks that are going to
make a very big difference to Bloomberg readers, to traders,
but also just to the average American. And their costs
of living.
Speaker 1 (01:13):
This is the Big Take DC podcast from Bloomberg News.
I'm David Gura. Today on the show Seleia and I
look at who Donald Trump has tapped to lead his
new administration and what those picks tell us about his
priorities Slay. It seems like this cabinet is coming together
pretty quickly? Am I right in my perception of that?
(01:36):
Are we getting these names, these nominations and appointments pretty fast?
Speaker 2 (01:39):
They are coming quickly. They're coming in an order that
we didn't really expect. Usually we see the White House
Chief of Staff come out first, which it did happen
this time. Susie Wilds was announced pretty quickly, but then
we're used to seeing Secretary of State and Treasury Secretary
announced very quickly after that.
Speaker 1 (01:55):
How different is the way this is playing out from
what we saw last time when he was elected back
in twenty sixteen.
Speaker 2 (02:00):
It's actually much more organized this time. Susie Wiles, who
was Trump's campaign manager and was credited for running a
very stable and almost leak free campaign, has become Chief
of staff for the White House and so now she
is running point on transition announcements and how Trump can
(02:22):
come to his decisions, as are having interviews and people
are coming through mar A Lago to talk about different priorities.
Where you're seeing things come out a little bit more methodically.
Speaker 1 (02:32):
You mentioned mar A Lago, the President's Club in South Florida.
What is the scene there like.
Speaker 2 (02:37):
It's a revolving door of people. Howard Lutnik, who is
in the running for treasure secretary, has been there for
more than a week now. Scott Bessant, who was also
in the running for treasure secretary, was down there recently.
We have Susie Wiles down there. Bob Leidheiser, who was
Trump's US trade representative during the first administration and now
is under consideration for a top you can policy job,
(03:00):
including Treasure secretary. He is also down there.
Speaker 1 (03:04):
You mentioned a minute ago, Susie Wiles, who was his
campaign co manager, Howard Lutnick, who's running this transition team.
To what degree are they influencing this process?
Speaker 2 (03:13):
That's a really interesting question. With Donald Trump, he makes
his own decisions. He likes to see a bit of
tension in the room. He likes to see different ideas
coming forth and see how his different advisors react to
different ideas. Trump is known to float names, get them
out into the media to see who it would be happy,
(03:33):
who would not be happy. I will say, when it
comes to the economic policy positions that we're watching the
most closely here at Bloomberg, especially treasure secretary, we expect
him to use his first term playbook and look for
a secretary with Wall Street chops.
Speaker 1 (03:50):
How much has that mattered to the President elect throughout
this process, having the backing of traditional Wall Street As
he makes this pick.
Speaker 2 (03:58):
It does sound like Trump someone with Wall Street pedigree
for the job, and most of the people that he's
looking at do have that in common. His first treasure secretary,
Steven Menusan, he lasted all four years, which was rare
in the first term for any cabinet officer to weather
all those storms that we saw from twenty seventeen to
twenty twenty one. And I think Trump did realize that
(04:21):
having stability in economic policy, making a treasure secretary who
can withstand the pressures of not just government but also
the unique features of serving under Trump, who has a
very different governing style, shooting from the hip. A lot
of policies made over social media. Sometimes it's like the
last advisor in the room is the one whose argument
(04:43):
kind of wins out those kinds of things. If it's
someone who can last through that and give markets and
Congress and international economic allies that kind of stability, I
think he is finding that that's a benefit. But at
the same time, there is a little bit of regret
that maybe Steven Mnushan was lukewarm on tariffs and served
(05:04):
as a bulwark to some of Trump's more surprising protectionist
economic proposals, and so this time he's coming back into
government not just on economic proposals but all across the board,
knowing that I want to make sure that the people
that I have on my cabinet who are implementing the
policies that I've been talking about for years now are
(05:25):
people who really do align with that vision and aren't
going to try to stop anything from happening.
Speaker 1 (05:30):
I wonder if there is an overarching theme to the
personnel choices that he's made so far. So we don't
have a full cabinet yet, but when you look at
who he has put forward, what ties them together?
Speaker 2 (05:40):
I would say fealty Trump learned in the first term
after having so much turnover and key jobs, especially in
the White House chief of staff role, especially in the
national security and foreign policy realm, and some of the
economic posts, not Treasure secretary, but you know, white House
National Economic Council director. Those jobs turned over so much.
(06:01):
People were fired via tweet, people left, they quit, they
were edged out or knifed out by each other. And
this time we are seeing that in fighting that was
a key feature of Trump one may not be a
feature in Trump two. It seems that he has less
tolerance for that kind of behavior.
Speaker 1 (06:22):
Coming up, we run through who Donald Trump is considering
to be his next Treasury secretary and what the different
candidates for the job could bring to the department. As
Donald Trump has put together his cabinet and picked senior
officials for his next term, there have been some surprises,
(06:45):
and of course that could happen again with his pick
for Treasury secretary. But Bloomberg Siliah Mosen says there are
four men who are considered front runners for the job.
Let's dig into that a little bit more. This is
your Bailey Wick. The position of Treasury Secretary, of course,
is a key job on or any administration. How important
is it to President Electrump?
Speaker 2 (07:04):
Oh? Incredibly important. He has a huge economic agenda ahead
of him. He is ringing forth protectionism, which is something
that our allies and adversaries around the world are nervously watching.
What kind of economic agenda does that mean if the
US is even more isolationist going forward. So he has
talked about ten percent tariffs across the board for pretty
(07:28):
much everyone, and a special sixty percent tariff rate maybe
for China. He's also talked about the dollar. It needs
to stay the world's reserve asset, but maybe it's also
too strong. And he's also talked about the Federal Reserve,
how a president should have a say in interest rates
and how the Fed manages the rate path, and which
economic policy advisors he chooses, whether it's enough people with
(07:51):
markets know how and who understand the plumbing of the
global financial system and can tell Trump what would market
react to in a positive way versus a negative way,
what could really wreak havoc in financial markets which would
cause Trump a lot of headaches. And also he doesn't
like that He likes to see market positive economic policies
(08:12):
going forth. Those are a couple of the things that
are at stake, and a lot of it comes down
to personnel.
Speaker 1 (08:18):
Let's start with Scott Besson hedge fund manager, somebody who
has been speaking out on behalf of the campaign, now
pretty vocal during the transition. What does he bring to
the table?
Speaker 2 (08:28):
So, Scott Bessant came into Trump's orbit only in the
past year to fifteen months. He has slowly won the
support of MAGA Republicans who are very close to Trump.
He has been out in the public on Bloomberg TV,
on other networks, writing op eds for different outlets, and
(08:49):
visiting journalists in their offices around Washington, boosting all of
Trump's economic policy proposals, which include tariffs, which include maybe
encroaching on the federal reserve a little bit. He's talked
about US China policy, He's talked about the dollar, He's
talked about financial regulation, all of the things that Trump
holds up as key pillars to his economic agenda. But
he's also emerged as a key advisor to Trump. Trump
(09:13):
has talked about Scott Bessett a lot in his rallies, saying,
you know, there's a great guy right there, Scott is
fantastic and Vasson also helped Trump write some of his
key economic policy speeches in the last few months, particularly
one at the Economics Club of New York, which came
with a lot of fresh news on what kind of
agenda Trump would have going forward.
Speaker 1 (09:35):
I know of him as a macro investor. What's his
reputation on Wall Street.
Speaker 2 (09:40):
He's known as someone who really understands global capital markets.
He's known as someone who is actively traded in markets
and can speak publicly about economic policy. He is a
little bit unknown in Washington, which is not unusual for
a Treasure secretary should he get the job. He has
not had a government job before, and so there is
(10:02):
some questions emerging about whether he is cut out to
deal with sort of the political thickets of Congress, having
to work with lawmakers in the House and the Senate
in both parties to do things like raise the debt ceiling,
you know, renew some of the tax cuts that are
going to expire next year. But he is known as
someone who markets see as their own person, which is
(10:25):
quite important for a treasure secretary because there are moments
during any kind of economic or financial crisis, large or small,
no matter where it's going on around the world, where
a treasure secretary has to lean on their personal credibility,
their personal gravita in order to calm markets and serve
as an emollient.
Speaker 1 (10:45):
Tell us if you would about Howard Lutnik.
Speaker 2 (10:47):
He has emerged this year as a really close advisor,
and like Bessett, he has raised millions of dollars for
the Trump campaign. He's also been a donor giving money
to Trump and also served as a bit of a surrogate,
but also hitting the airwaves, going out there boosting proposals,
touting policies, and then he became the co chair of
(11:08):
Trump's transition efforts. But he might be playing a little
bit of a you know, the Dick Cheney playbook, where
he has decided, I'm running transition efforts, and I'm also
going to see if i can get a job that
I want by putting my name in the ring. And
you know, the latest reporting from Bloomberg is that that's
something that is chafing Trump allies and key advisors. They
(11:30):
don't love that Lutnik is somewhat aggressively jockeying for a job,
specifically treasure secretary.
Speaker 1 (11:38):
We saw someone else who is reported to be in
the running, John Paulson, drop out of the race to
be Treasury secretary, citing the fact that his personal finance
is just too complicated. Is that a factor that's affecting
others that we're talking about.
Speaker 2 (11:50):
Here, Yeah, just like last time, that is a bit
of a pattern that these are very rich men who
are looking to come into the administration. There are ways
around that. If you are willing to give up the
idea of being a cabinet secretary, you can come in
as a special government employee, which is something that Elon
Musk is doing. Who's going to be heading up apparently
(12:11):
government efficiency, a newly created department, and so that means
you don't have to divest. But Treasury is unique. If
you are a treasure secretary, you have a hand in
public financing, so that's the almost thirty trillion dollar market
for treasuries that are out there. Also financial regulation, so
that affects banking stocks. You also oversee the IRS, and
(12:32):
you also oversee US currency policy, so the currency market
gets involved there. So you have you know, these secretaries
have to divest from a large amount of their investments.
So the problem, the key problem for John Paulson is
that he has an undisclosed and purportedly large investment in
Fanny May and Freddie Mack, which are two government owned
(12:54):
mortgage giants, and so any treasure secretary would also could
have a say in the future of those two vehicles.
And so we are seeing that someone like Lutnik, or
someone like Elon Musk or even John Paulson, they would
struggle to find a way out of all of those
investments and maybe even take a loss in certain cases
(13:15):
in order to take one of these jobs.
Speaker 1 (13:17):
So I guess one way you can ascertain who's in
the lead here is by how often the president elect
is named checking these individuals. You mentioned that he would
invoke Scott Besson's name. I was covering the campaign a
bit and heard him bring up Bob Litthheiser a lot.
As you said, he was the president elex former US
trade representative. What does he represent when you look at
(13:37):
sort of candidates for leading treasury.
Speaker 2 (13:39):
Yeah, so Lightheiser is a known China hawk. He has
already started creating plans for tariffs that would involve China
and the European Union. So if he ends up in
some kind of a position where he is not a
cabinet secretary but is able to oversee just the trade
policy portfolio, that means he wouldn't distracted by other parts
(14:01):
of let's say, Treasure secretary, which would include financial stability work,
debt management, economic sanctions, overseeing the Internal Revenue Service, things
like that. But he does want to manage trade policy.
He was pretty aggressive with tariffs the first round, and
Trump really admired the work that he did.
Speaker 1 (14:20):
Last time. I'll ask you about is Jay Clayton, the
former chair of this Curious and Exchange Commission, left that job,
joined Sullivan Cromwell, a white shoe law firm here in
New York.
Speaker 2 (14:30):
He's a little bit different than the other three candidates, right.
He is not, at his core a Wall Street guy.
He's worked on M and A deals, but as a lawyer,
not as an investor, hedge fund manager, or trader. Now,
one thing to remember is that with all of these candidates, yes,
all four of these names that we've just talked about
are in the running for a Treasure secretary, including Jay Clayton.
(14:50):
But each of these people could also fit into other
jobs in the Trump administration. You know, you also need
a National Economic Council Director. You also need someone to
run your Council of Economic Advisors. So we should just
bear in mind that some of the names that we're
talking about could end up in the administration, but not
necessarily Treasure secretary.
Speaker 1 (15:08):
I wanted to ask you how soon you think we'd
feel the imprint of this new Treasury secretary.
Speaker 2 (15:13):
Well, when it comes to markets, we're already seeing the
imprint of a Trump presidency in Donald Trump himself. I
think that as soon as a name is announced, we
should expect even just a brief blip in markets, particularly
if it is Bob Leithheiser. That is one thing that
I know investors that I've spoken to in the last
couple of months have said that they're really really wondering,
(15:34):
like kind of worried is it going to be Bob Leitheiser.
That's going to be a little bit more explosive for
the key policies and agenda items that investors tend to
be most concerned with. It just means that maybe a
little bit more aggressive decoupling between US and China and
more aggressive with allies in terms of tariffs and trade policy.
So we could see a market reaction in that, and
then there also might be a reaction when it comes
(15:57):
to the US dollar, which has moved around a lot
in the last couple of weeks, it's been very strong
under Donald Trump, just by way of Trump being elected,
and you know, Scott Bessett, just to talk about him
for a moment, he did say on Fox a couple
of days ago that the dollar loves Trump. So a
strong dollar is a reflection of approval for Trump. But
(16:18):
we could also then expect to hear some comments on
is this a secretary designate who is going to then
really work hard to implement weaker dollar policies that Trump
has often talked about. Beyond that, I think we're going
to find out I think soon what the first hundred
days or you know, Q one tasks are going to be.
(16:38):
In terms of economic policy, I think in terms of
like how quickly they can resolve any kind of debt
sealing standoff issues. But also tax policy is going to
be the first one that needs to be resolved by
the end of twenty twenty five, when Trump's tax cuts
from twenty seventeen some of them expire, and that's sort
of a first chance for Trump's economic policy team, probably
(16:59):
led by the Treasure Secretary, to have an impact on
American consumers. So those are sort of the key points
that we could see and imprint kind of quickly in markets,
which can eventually trickle down to the economy.
Speaker 1 (17:12):
When it comes to economic policy, how important is stability.
Speaker 2 (17:16):
It's hugely important. Markets want to know, they want predictability
and stability. They want to know where policy is headed.
You know, personnel is policy. So if they see that
there is personnel stability, that helps. Also when you have
things like you know, when COVID hit. At that time,
there was only one person on the economic policy team
and the Trump administration who had any kind of relationship
(17:39):
with Nancy Pelosi, who was then the House Speaker, and
that was Steven Mnusian. So Mnusian and Pelosi were able
to talk to each other, fine common ground and pass
a COVID relief bill, you know, a trillion dollar COVID
relief bill, rather quickly, when no one else in the
Trump administration wanted to talk to Pelosi. And so the
fact that those two were able to cultivate a relationship
(18:00):
comes from the fact that there was continuity in who
was running and overseeing economic policy.
Speaker 1 (18:05):
Sealia, thanks very much, happy to join. Thanks for listening
to the Big Take DC podcast from Bloomberg News. I'm
David Gura. This episode was produced by Julia Press. It
was mixed by Alex Segura and fact checked by Andreana Tapia.
Senior producer Naomi Shaven and Wendy Benjaminson edited the episode.
Wendy and Elizabeth Ponso provide editorial direction. Nicole Beamster bor
(18:29):
is our executive producer. Sage Bauman is Bloomberg's head of podcasts.
Please follow and review The Big Take DC wherever you
listen to podcasts. That helps new listeners find the show
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