As President-elect Trump narrows down his choices for Treasury Secretary, markets are taking note of the frontrunners: Scott Bessent and Howard Lutnick.

Both have proven loyalty to Trump, making substantial contributions to his campaign and participating actively in his transition efforts.

However, these two candidates bring distinctly different approaches and personalities to the table—qualities that the financial markets will weigh as Trump makes his final decision.

Scott Bessent, Expert in Bonds & Foreign Exchange

Scott Bessent, founder of Key Square Group and former economic advisor to Trump’s campaign, stands out as the candidate likely to gain favor with markets.

Known for his expertise in bond and currency markets, Bessent’s background equips him with the knowledge to navigate potential turbulence stemming from Trump’s trade policies and other economic shifts.

Having spent over a decade with prominent investor George Soros, Bessent is no stranger to high-stakes financial decision-making and has the capability to interact with global markets in a way that may reassure investors.

One of Bessent’s primary appeals lies in his moderate stance on Trump’s more aggressive economic proposals.

While he supports Trump’s general vision for deregulation and energy independence, he has been cautious about blanket tariffs, especially those targeting China.

This moderate position may be a relief to investors concerned about potential economic backlash from sweeping trade restrictions.

The financial world values predictability and stability, and Bessent’s approach could serve as a counterbalance to the more populist elements of Trump’s economic policy, making him a figure of continuity that markets could rally behind.

In addition, Bessent’s public image reflects a sophisticated, steady presence. In contrast to the aggressive, populist tone favored by some Trump allies, Bessent is seen as diplomatic and adept at engaging with both Wall Street and international financial bodies.

This perception, combined with his deep understanding of bond and currency markets, would likely promote a smoother relationship between the Treasury and financial institutions, allowing markets to maintain confidence amid Trump’s proposed policy shifts.

Howard Lutnick: A Populist With a Tariff-Focused Agenda

On the other side is Howard Lutnick, CEO of Cantor Fitzgerald, whose approach aligns more closely with Trump’s bold, populist style.

Lutnick has vocally supported Trump’s tariff plans, even evoking the early 1900s era when tariffs played a central role in US economic policy. His rhetoric is likely to resonate with the President-elect’s base, which champions domestic manufacturing and economic nationalism, but it raises concerns for a globalized economy that thrives on free trade.

Markets tend to be wary of trade barriers, particularly broad tariffs that could invite retaliation from trading partners and increase costs for consumers.

Trump’s proposal to impose a general tariff of 10-20% on all imports, along with a hefty 60% tariff on Chinese goods, represents a high-stakes gamble on a protectionist agenda.

Lutnick’s enthusiastic endorsement of these policies could signal a more combative approach to international trade, one that risks creating friction with key economic partners.

While some market participants may appreciate Lutnick’s staunch support of Trump’s vision, others may fear the potential consequences.

Economists have widely criticized across-the-board tariffs for their inflationary effects, which could lead to price increases on consumer goods, diminished purchasing power, and strained international relations. For a financial market that prefers stability, Lutnick’s alignment with Trump’s protectionist stance could create volatility and invite uncertainty.

Pragmatic Choice for Markets

From a market perspective, Bessent represents a pragmatic choice for Treasury Secretary.

His background in investment management and moderate stance on tariffs suggest that he would approach Trump’s economic agenda with a degree of caution that could mitigate adverse impacts on markets.

While he supports Trump’s goals of strengthening US industry and deregulating the economy, Bessent’s nuanced perspective on tariffs and ability to communicate with market participants make him a candidate who could soothe investor nerves.

Ultimately, markets would likely prefer Scott Bessent as Treasury Secretary. His balanced outlook and expertise in key financial areas suggest a steady hand capable of implementing Trump’s economic policies without spooking investors.

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London-born Nigel Green is founder and CEO of deVere Group. Following in his father’s footstep, he entered the financial services industry as a young adult. After working in the sector for 15 years in London, he subsequently spent several years operating within the international space, before launching deVere in 2002 with a single office in Hong Kong. Today, deVere is one of the world’s largest independent financial advisory organizations, doing business in 100 countries and with more than $12bn under advisement. It specializes global financial solutions to international, local mass affluent, and high-net-worth clients. In early 2017, it was announced that deVere would launch its own private bank. In addition, deVere also confirmed it has received its own investment banking license.