The banking industry has largely applauded President Trump’s nomination of Scott Bessent — a hedge fund veteran and former George Soros associate — to lead the Treasury Department, but whether he is able to wield influence in an administration with a markedly anti-establishment bent remains uncertain. 

The financial establishment was largely relieved to hear of Bessent’s selection for the high-profile role because of his deep knowledge of and mastery of global finance and in the hopes that he can serve as a check on the more aggressive and counterproductive elements of Trump’s economic agenda. 

“The question has always been whether the Trump administration will follow the path from the first administration — where they had a fairly traditional person as Treasury secretary and appointed traditional Republican type candidates for most of the regulatory agencies — or whether this time around, it would be more radical,” said Todd Baker, senior fellow at the Richman Center at Columbia Business and Law Schools. “The indication from the appointment of Bessent is that they’re going to follow the plan from the first administration, where, essentially, the Treasury secretary protected the agencies on the financial side from any of the more extreme folks who were in more of the public-facing agencies.”

In recent interviews, Bessent has played down some of Trump’s campaign proposals, portraying his proposed 25% tariff on all Canadian and Mexican products with an additional 10% tariff on imports from China as a negotiating tool. Following pressure, Bessent has since taken a more bullish stance on tariffs in an opinion piece but even still said the president would gradually phase tariffs in over a couple of years. 

Baker said that balancing act between established economic practice and Trump’s more aggressive impulses may be difficult for Bessent to perform, particularly when it comes to battling inflation — one of the most important issues for voters in the 2024 election. Baker notes that early indications suggest some of the proposed policies — tariffs and deportations — could exacerbate inflation. 

“The Treasury Secretary will have to deal with that within his or her remit, and that often involves significant conflict with the Fed, which is going to do what it has to do to fight the inflation that the tariff policies — among other things — are likely to stimulate,” he said. “I anticipate this being a challenge for Bessent, because he may well be the face of conflict with the Fed over interest rates.”

Bessent will also have to contend with other Trump cabinet picks that hew more closely to the “America First” approach. Jamieson Greer, Trump’s pick for U.S. trade representative and a protégé of trade advisor Robert Lighthizer, has signaled a willingness to use the threat of tariffs to pressure foreign nations on immigration and economic policies. Cantor Fitzgerald CEO Howard Lutnik — who Trump selected as the next secretary of commerce and who was himself on the short list for Treasury secretary — has similarly gotten behind Trump’s economic agenda.

“Bessent, while seen as a relief to the markets, will likely have relatively little control over Trump’s tariff plans,” wrote policy advisors at Beacon Research. “Howard Lutnick will have more influence, but still, part of the reason he and Bessent were selected was because Trump felt they would not stand in his way in the event of a disagreement.”

The administration will consist of an ideologically split team of advisors according to Todd Phillips, an assistant professor at Georgia State University. 

“I think what we’re going to be seeing is something most like a team of rivals,” he said. “As Treasury secretary, you can only do so much … you are not the [final] decision maker on a variety of things, like tariffs.”

Baker says given the lengthy nomination vetting process, the president-elect would not have appointed Bessent unless he broadly agreed with the economist’s interpretations of Trumpian economics. He also notes Bessent’s extensive experience with international markets could give his opinion more weight given the likely impact of tariffs on the U.S.’s international trade profile. 

“It’s clear that the Trump people thought pretty hard about it and he must have given commitments to whatever the basic policy outlines are that are coming,” he said. “So I would assume they’ve chosen him in part because they think he won’t get in the way whatever it is that they’re doing and [at the same time] will try to manage Wall Street so that Wall Street doesn’t get excited or upset about what’s going on.”

Bessent is likely to at least advocate for trimming some of Trump’s stances, according to Jaret Seiberg, analyst at TD Cowen, even if he ultimately does not win such policy fights. 

“We believe Bessent will be a voice within the White House to be strategic in the use of tariffs to tear down trade barriers … [and] caution against mass deportations,” he wrote in a note. “Getting too aggressive on either front could impact the performance of the stock market, which we believe is Trump’s primary gauge for the economy.”

As Treasury secretary, Bessent will also wield the gavel of the Financial Stability Oversight Council, an interagency body that has been focused in recent years on activities-based oversight of nonbanks — work that is likely to continue under the next administration. Phillips said Bessent’s confirmation would assure that nonbanks will not be designated as systemically important financial institutions over the next four years. 

“I don’t think that we will, you know, see any designations going on during the Trump administration,” he said. “FSOC is going to be a reading group, which is unfortunate. There are a lot of firms that really should be designated.”

Bessent has also drawn attention for his unorthodox proposal on altering the Federal Reserve leadership structure. Bessent suggested nominating a successor to Federal Reserve Chair Jerome Powell well before his term ends in 2026, effectively diminishing Powell’s authority through forward guidance. This idea aligns with Trump’s broader criticisms of the central bank and his push to assert more executive influence over monetary policy.

Baker dismissed Bessent’s proposal as legally unsound and more of an attempt to undermine the Fed’s independence and shift blame for inflationary policies onto the institution. 

“To the extent that law matters at all, the Fed chair cannot be removed, nor can [Federal Reserve Vice Chair for Supervision] Michael Barr be removed from the Fed, though he can be removed from the bank supervision, and then he will be,” he said, adding “it’s going to be a tough time to be on the Fed board.”

Whether Bessent is a force within the administration or succumbs to countervailing forces within the administration is an open question, Baker said, since Bessent can be removed by the president at any time. 

“This does put Bessent in a precarious position, just as it puts everyone in Trump’s cabinet in a precarious position,” he said. “There is clearly some tension in who all has the president’s ear, and we’ll just have to wait and see.”