Trump Names Scott Bessent Treasury Secretary, Dollar Dips Amid Market Uncertainty

Bessent, the CEO of Key Square Group, has advocated for an extension of tax cuts from Trump’s first term, wants to re-establish American energy dominance, and believes it is vital to address the budget imbalance.

Trump stated that Scott is widely regarded as one of the world’s leading international investors, as well as geopolitical and economic thinkers. Bessent’s appointment will strengthen the US economy, revitalise the private sector, and reduce federal debt, according to the president.

Dollar Retreats as Markets React to Bessent’s Appointment and Tariff Uncertainty

The dollar index, which monitors a basket of currencies including the yen and euro, fell as high as 0.7 percent in Asia before reducing losses to trade down 0.6%. The euro gained 0.7% against the US dollar. As of now, DXY is traded with a decline of 0.7%.

From the beginning of last month to Friday, the index gained more than 7% on predictions that Trump’s tariff and tax cuts will fuel inflation and put upward pressure on US interest rates.
However, investors interpret Mr Bessent’s appointment, who last month branded sweeping tariffs as “maximalist” attitudes, as a warning that the president-elect’s policies may be softened.

US Treasuries, which had fallen off in anticipation of inflationary pressures, have rallied. The US 10-year yield declined 0.094 percentage point to 4.316 percent. Yields move inversely to prices.

Scott Bessent, Donald Trump's pick for Treasury secretary, wants tariffs, a shadow chair for the Federal Reserve and maybe a weaker dollar. https://t.co/bTrlN9LJyk

— Bloomberg (@business) November 24, 2024

S&P 500 futures rose 0.47 percent. The Stoxx Europe 600 increased 0.18 percent, while the UK’s FTSE 100 increased 0.3%. Tariff fears have sent European stocks lower than US markets.

Major Asian trading partners of the United States were encouraged by the nomination. Japan’s export-heavy Nikkei 225 index and South Korea’s Kospi both ended up 1.3%.

Investors Await FOMC Minutes for Fed Policy Clues

Meanwhile, market investors are waiting for additional signs about potential Fed moves. On Tuesday, the United States will disclose the FOMC meeting minutes, which may provide more insight on the December meeting. The meeting occurred just after Trump won the election, changing the outlook for the US economy.

As a result, officials may have adopted a more cautious tone, lowering expectations for Fed rate cuts. Markets currently price in a 52% possibility of a December rate drop. Hawkish minutes might push this probability below 50%, further strengthening the dollar.