Donald Trump has picked Scott Bessent to be his US Treasury secretary, nominating one of his biggest financial backers as the top economic official of his second administration.

Bessent will be responsible for overseeing the president-elect’s most prominent economic pledges, including sweeping tax cuts, while maintaining the stability of the world’s largest economy, its most important bond market as well as the dollar.

The hedge fund manager’s economic philosophy seeks to bridge traditional free-market conservatism with Trump’s populism. He has defended the president-elect’s repeated threat of raising tariffs against accusations that they would upend relations with US allies and raise consumer prices, saying they are a trade negotiating tool and a way to raise government revenue.

In a statement on Friday, Trump described Bessent as “one of the world’s foremost international investors and geopolitical and economic strategists”, who was “widely respected”.

“He will help me usher in a new golden age for the United States, as we fortify our position as the world’s leading economy, centre of innovation and entrepreneurialism, destination for capital, while always, and without question, maintaining the US dollar as the reserve currency of the world.”

Trump added that with Bessent at the helm, his administration “will reinvigorate the private sector, and help curb the unsustainable path of federal debt”.

Bessent will also be responsible for steering the administration’s sanctions policy, including on Russia over its full-scale invasion of Ukraine, as well as the rules that govern Wall Street. His appointment will need to be confirmed by the US Senate, which will be controlled 53-47 by Republicans next year.

Trump on Friday evening also selected Russell Vought to once again lead the Office of Management and Budget. “Russ knows exactly how to dismantle the Deep State and end Weaponized Government, and he will help us return Self Governance to the People,” Trump wrote. The president-elect also picked Lori Chavez-DeRemer, a Republican Congresswoman from Oregon, to be his labour secretary.

Wall Street bankers across the political spectrum were digesting the news of Bessent’s appointment. They pointed out that a lot would depend on how much independence he would have to manage the economy. 

A dealmaker at a large bank said Bessent had a strong pedigree managing complex financial situations but was concerned that he would be a “puppet” of Trump.

“Bessent is a very skilled investor, he has a great track record over decades but I fear he won’t have much autonomy,” the dealmaker said.

The 62-year-old Bessent is a Wall Street veteran who has been among Trump’s most vocal advocates and closest economic advisers in recent months.

It will be his first government position. He currently runs the hedge fund Key Square Capital Management. Bessent previously worked closely with billionaires George Soros and Stanley Druckenmiller.

Trump also went with a Treasury secretary who had Wall Street experience during his first term, when former Goldman Sachs banker Steven Mnuchin held the post.

“There’s nobody with a better understanding of markets [than Bessent] to manage $36tn in debt, who’s a vocal advocate of the president-elect’s economic agenda, and has the stature around the world to navigate the global economic challenges we need to confront,” said Michael Faulkender, a finance professor at the University of Maryland’s Smith School of Business and chief economist at the Trump-aligned America First Policy Institute.

A top corporate lawyer and longtime Democratic donor said that Trump’s decision was encouraging. “[It is a] sensible choice that will reassure the financial community. The Treasury functioned well under Mnuchin and I would expect Bessent to provide similar stability,” the lawyer said.

Apollo Global Management chief executive Marc Rowan and former Federal Reserve governor Kevin Warsh were candidates for the Treasury role, travelling to Mar-a-Lago this week for interviews with Trump. So was Howard Lutnick, Cantor Fitzgerald’s chief executive, who is also co-chair of the Trump transition team. John Paulson, another billionaire hedge fund manager, had also been in the running before dropping out.

In a statement on Friday, Paulson called Bessent an “outstanding pick”.

“He has the market experience and financial acumen to successfully implement President Trump’s economic agenda.”

The nomination of Bessent, who is seen as a pragmatic pick, is among the most important of Trump’s cabinet picks and follows a number of controversial appointments, including Fox News host Pete Hegseth for defence and vaccine-sceptic Robert F Kennedy Jr as health secretary. The president-elect had also nominated former Florida congressman Matt Gaetz to run the justice department, but he withdrew his name from consideration for the role.

Bessent, a Yale University graduate who grew up in South Carolina, will take the helm of a US economy that is on solid footing. After the worst cost of living crisis in decades, inflation has steadily declined following a period of high interest rates. Unemployment remains historically low at 4.1 per cent, keeping consumer spending strong.

Many economists have warned that Trump’s protectionist economic plans, and his pledge to deport millions of immigrants and slash taxes, could reignite inflation and dent growth — criticism that Bessent has strongly rejected.

In an interview with the Financial Times in October, Bessent framed tariffs as a “maximalist” threat that could be pared back during talks with trading partners. He also denied that the Trump administration would devalue the dollar.

“My general view is that at the end of the day, he’s a free trader,” Bessent told the FT, referring to Trump. “It’s escalate to de-escalate.”

But Bessent has floated more unorthodox ideas, including taking steps that would infringe on the long-standing independence of the Fed.

Speaking to rightwing ideologue and Trump ally Steve Bannon recently, he also floated cutting government spending by $1tn over the next decade.

President-elect Donald Trump has chosen former Texas state Rep. Scott Turner to serve as secretary of Housing and Urban Development. Turner spent nine seasons in the NFL with teams in Washington, San Diego and Denver before being twice elected to the Texas House of Representatives, serving from 2013 to 2017.

Turner now chairs the Center for Education Opportunity at the America First Policy Institute, a think tank set up by former staffers from Trump’s first presidency.

In a statement, Trump said during his first term, Turner was the first executive director of the White House Opportunity and Revitalization Council, “helping to lead an Unprecedented Effort that Transformed our Country’s most distressed communities.”

“Those efforts, working together with former HUD Secretary, Ben Carson, were maximized by Scott’s guidance in overseeing 16 Federal Agencies which implemented more than 200 policy actions furthering Economic Development,” the statement read. “Under Scott’s leadership, Opportunity Zones received over $50 Billion Dollars in Private Investment!”

Trump’s first administration tried to restrict housing aid and cut HUD’s budget

The first Trump administration repeatedly proposed deep budgetcuts to HUD, but they never passed Congress. Some executive action to restrict public assistance — for housing and other benefits — was made later in the term and never finalized. But many housing and anti-poverty advocates think this time will be different.

Scott Turner, chairman of the Center for Education Opportunity at the America First Policy Institute, speaks during an event at the institute in January 2022

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“The agenda is much more organized now,” says Peggy Bailey, executive vice president for policy and program development at the Center on Budget and Policy Priorities. “We do anticipate some pretty significant budget fights.”

For one thing, she says, there will be fewer moderate Republicans likely to push back in the next Congress. And the Trump team will enter office with an extensive agenda of policy proposals laid out in Project 2025. Trump has denied any connection to the Heritage Foundation document, but the chapter on HUD was written by his first-term HUD Secretary, Carson, and includes many proposals from his time leading the department.

The Project 2025 proposals include:

• Ban families with undocumented members from living in federally assisted housing. Undocumented immigrants are already barred from receiving subsidies. But a HUD analysis found the rule would have put tens of thousands of their family members who are U.S. citizens or legal residents, mostly children, at risk of eviction or homelessness.  

• Eliminating a new federal fund to boost the supply of affordable housing. A footnote to this item says federally subsidized housing distorts the market by raising demand. It suggests a better approach is to encourage construction by loosening local zoning rules and streamlining regulations. 

• Repealing (again) a rule meant to prevent segregation and comply with the Fair Housing Act. Carson had argued the rule demanded “unworkable requirements.”

• Ending a homelessness policy known as Housing First, which places people in subsidized housing and then helps them address drug and mental health addictions. Trump and conservative allies have said sobriety should be the first requirement, something homelessness advocates say has been tried before and failed. 

• Tightening work requirements for people who receive federal housing subsidies. (The first Trump administration also tried this for recipients of food aid, but it was blocked in federal court.)

Beyond Project 2025, Bailey and others point out that congressional Republicans have continued to propose major funding cuts to HUD, along with trillions of dollars in cuts over a decade across a wide array of other social safety net programs including healthcare, food aid and assistance with heating and cooling bills.

When it comes to deep funding cuts, ‘the optics there might not be great’

If all these budget proposals were to be enacted, “you should expect large increases both in the scope of poverty and in the depth of poverty,” says Bob Greenstein, a visiting fellow at the Brookings Institution and the founder and former president of the Center on Budget and Policy Priorities.

Dr. Ben Carson, former secretary of Housing and Urban Development, speaks during this summer’s Republican National Convention in Milwaukee.

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He also sees an irony, since many of the programs target not only the poor but also modest and moderate-income people. “Among the people who would be hurt most seriously are working-class families, the very people who are now part of [Trump’s] political base,” he says.

But not everyone thinks that’s likely.

“I would be surprised if there were substantial budget cuts actually enacted,” says Kevin Corinth, a senior fellow at the American Enterprise Institute who served as an economic adviser in the Trump White House.

The presidential campaign made clear that the high cost of living is a huge issue for many Americans, he says, and “the optics there might not be great to roll things back.”

He does think the administration will be better able to push through the regulatory changes it started in its first term, restricting noncitizens in public housing and tightening enforcement of work requirements.

Corinth also supports longer-term goals that Project 2025 lays out for HUD. They include selling land owned by public housing agencies to private developers for “greater economic use.” That could mean fewer people living in traditional public housing, and more instead using federal vouchers to rent in the private market. Project 2025 also calls for shifting rental assistance to other agencies, and pushing people to become self-sufficient by setting time limits on rental subsidies.

Corinth says time limits make sense because people do not have a right to rental aid like they do with food or health care; only 1 in 4 people who qualify can actually get it. “So it’d be much more fair to families to say, ‘Look, you’re going to get this assistance but it’s only for a couple of years, get you back on your feet,’” he says.

But none of those changes are “a real solution,” says Sarah Saadian, with the National Low Income Housing Coalition. She says breaking up HUD would only shift responsibility. And most residents who can work already do, “they’re just not getting paid wages that are high enough to afford housing,” she says.

In any case, Corinth thinks the next Trump administration will have more urgent priorities than a sweeping transformation of HUD’s role. They include pushing through a major tax cuts package in its first year. If housing does then rise on the agenda, he thinks it’s more likely to focus on the private market – and addressing the massive shortage that has sent home prices and rents skyrocketing.