In his business career, Scott Bessett was widely recognized as one of the world s foremost macro hedge fund managers. He s given that up to serve the American people. Scott is a free thinker, a libertarian, and a strong supporter of digital currency. But above all, he is a Trump loyalist who is playing a key role in implementing the president s strategy for the golden age.
00:01:16.380Tell us the implications from your point of view.
00:01:18.280Yeah, Roger, this one big, beautiful bill is the most important piece of legislation that's going to pass this year.
00:01:28.540The president's economic agenda is the three-legged stool.
00:01:32.740It's trade, it's taxes, and it's deregulation.
00:01:35.820And all I hear as Treasury Secretary, all I hear from people who don't like the tariffs is uncertainty, uncertainty, uncertainty.
00:01:45.520But then the same people who complain about uncertainty about the tariffs, they are trying to block this tax bill.
00:01:54.400And I can tell you that the certainty that will come from this tax bill is the stimulus in and of itself.
00:02:00.440And as you said, if you want to see a deficit blowout, don't pass this tax bill because the growth will collapse.
00:02:12.400And this is the – we're making the 2017 Tax Cuts and Jobs Act permanent.
00:02:22.580We are putting in full expensing for equipment and machinery.
00:02:28.480We're putting in full expensing for factory structures.
00:02:32.780So not only is the U.S. the best place to have a factory, it's going to be the most tax-effective place to build one and furnish it out with equipment.
00:02:44.580And then we're – this bill also contains the president's campaign promises of no tax on tips, no tax on Social Security, no tax on overtime, and tax deductibility for auto loans for American-made cars.
00:03:00.740And so, Roger, every Democrat who voted against this bill voted against a tax cut on Social Security, every single one of them.
00:03:16.620Secretary, this morning I saw that you met with community bank leaders from both in and outside New York as well as small business owners.
00:03:25.060What did you hear from them, and how is the Trump administration approaching small business overall?
00:03:31.420One of the things I respect about you is you're a man who understands both Wall Street and Main Street.
00:03:36.100I think this is particularly relevant at this time.
00:03:40.700You know, Roger, when you're from Little River, South Carolina, and then move to Park Avenue, you understand Main Street and Wall Street.
00:04:02.300It's time for Main Street to play some catch-up.
00:04:05.000And I think that one of the key elements for Main Street playing catch-up are these small community banks, small town banks, or small regional banks that have just been throttled in their growth prospects and inability to serve their communities by all this excess regulation that we got coming out of the great financial crisis.
00:04:29.960And I used to teach economic history, and the history is that when you have a crisis, there's always an overreaction.
00:04:39.980And what these small bankers from mostly New York, but some from around the country, have told me is that this regulation is killing them.
00:04:52.24070% of agricultural lending is from small banks, 40% of small business lending, and we've got to get these banks on their feet, healthy, and lending again.
00:05:09.840And they're chomping at the bit to go.
00:05:12.440They just need the right policies, which is what the Trump administration is trying to do.
00:05:18.460The previous administration, as we know, was extraordinarily hostile to digital currency, cryptocurrency.
00:05:30.380The president has embraced cryptocurrency as a vibrant industry in our country and an alternative monetary system.
00:05:39.300Why is crypto, why is digital currency so important?
00:05:44.000Well, Roger, it was even important as the Biden administration was trying to kill it.
00:05:53.340What's important is for the U.S. to be the digital asset leader, as we are the technological leader in every other aspect, whether it's AI or CRM solutions.
00:06:07.580And it is important for the U.S. to be the leader because we will bring crypto and digital assets onshore.
00:06:16.980We're going to have a thriving ecosystem here.
00:06:22.060Everything from Bitcoin to stable coins and everything in between.
00:06:26.520We're going to apply U.S. best regulatory practices, which is safe, sound, and smart.
00:06:35.080And those will go out to the rest of the world.
00:06:38.040These blowups that you see in the rest of the world, like Sam Bankman-Fried down in the Bahamas, that wouldn't have happened if we'd been onshore in the U.S.
00:06:53.360And fortunately, these companies and the crypto entrepreneurs persevered through what could have been an extinction phase the past four years.
00:07:05.020And now it is a pleasure to work with them and set up the proper regulatory framework for the U.S. to take the lead and push this important.
00:07:17.180It's such an interesting combination to me as somebody who has studied fiscal policy and monetary policy.
00:07:26.320And then you combine that with technology.
00:07:29.080And the U.S. absolutely has to have the lead in this.
00:07:32.320I think this is one of the most important and exciting things that the president is doing.
00:08:16.220And, Roger, you've known President Trump a lot longer than I have.
00:08:21.260But I can tell you the joy of working with him is that he has created maximum leverage for his trade team by pushing so hard on both our allies, who have taken advantage of us,
00:08:41.380and some of our adversaries or competitors or competitors, trade competitors, military competitors like China.
00:08:49.020He's pushed hard on both of them to bring them to the table.
00:08:53.620Your listeners should understand that there are 18 important trading relationships, and we are pushing those first.
00:09:04.320We reached a deal very quickly with our oldest ally, the U.K.
00:09:10.380It's going to mean between $5 billion, $10 billion of new trade for U.S. companies and ag products that is going to benefit the American people.
00:09:22.900We went to, we had had an unfortunate escalatory phase with China, because on Liberation Day, we had said, do not escalate.
00:12:58.720And he said, great job, Mr. Secretary.
00:13:02.100The gasoline is at $1.93 and diesel is at $3.
00:13:07.300I said, well, you know, I wish I could take credit for it.
00:13:10.220But it's the market and it's the president's policy of energy independence.
00:13:16.420And then other inflationary aspects, service inflation is coming down.
00:13:22.000So, I think once this kind of fear mongering that we're going to have this big wave of inflation comes down, we will go back, Roger, to President Trump's, something similar to President Trump's first term, where we had high levels of growth and it was non-inflationary.
00:13:43.080And that is what creates the golden age.
00:13:45.940Mr. Secretary, do you think that the chairman of the Federal Reserve, Jerome Powell, should cut interest rates?
00:13:54.560You know, Roger, I made the pledge when I was confirmed that I wouldn't talk about the mistakes that the Fed is going to make.
00:14:06.840I would only talk about all the ones that they have made, but I will.
00:14:14.800I do think that inflation is under control, but growth is good.
00:14:24.920Growth continues to surprise all the pundits and the naysayers.
00:14:34.900So, we'll see what happens with rates.
00:14:40.560Yeah, the president has said he believes that the Fed should cut rates, so neither you nor I need to say it.
00:14:46.720I think the president is absolutely right.
00:14:49.720How close are we to a bank deregulation deal?
00:14:53.200Would that not make it easier for banks to hold those Treasury notes we spoke of?
00:14:58.480Yes, I think we will get something over the summer.
00:15:03.560There's a technical term called the supplementary leverage ratio.
00:15:08.280And, Roger, I began my career on Wall Street in 1984 as a banks and insurance analyst.
00:15:15.320So, I know how these Bs work from the inside and how bank regulation should work and could work.
00:15:25.380And we are pushing to have this supplementary leverage ratio either reduced or removed.
00:15:32.720And it will allow banks to buy more Treasuries.
00:15:37.700And it's the craziest thing you've ever seen.
00:15:39.980They're going to take a big capital charge for holding a risk-free asset.
00:15:43.840So, during COVID crisis, there was an emergency lifting of the supplementary leverage ratio and caused rates to go down tens of basis points.
00:16:00.060So, I think we could see anywhere from 30 to 60 basis point decrease in rates based on this over time.
00:16:12.260The President had announced the creation of the Sovereign Wealth Fund as the administration's priorities include paying down the national debt.
00:16:22.340For the time being, they have paused those plans.
00:16:25.120There's plenty on the President's plate and on yours.
00:16:28.200At what point will you feel comfortable about getting that fund up and running?
00:16:33.140And what types of investments do you think it would make?
00:16:35.600Well, Roger, the President is moving at breakneck pace.
00:16:46.380But he's doing peace deals, trade deals, and tax deals.
00:16:50.220And once those settle down, I would think that once we get over the hump and this deficit to GDP starts going down,
00:17:05.320the total debt to GDP stabilizes and starts going down, and we are paying down debt,
00:17:12.340then the Sovereign Wealth Fund will be on the table because I'd like to focus on this as a real legacy asset for the President.
00:17:24.980Because what I have observed, and I'm a professor, well, was a professor, too, of economic history is aside from my day job,
00:17:34.180President Trump is the first president in centuries who wants to create assets for the American people and not debt for the American people.
00:17:48.660So I think if on the backside of the American people, excuse me, in 26, 27, 28, we can stand up the Sovereign Wealth Fund,
00:18:05.660it would be a great lasting legacy for a president who wanted to create assets.
00:18:10.960And I could see a range of things being in it.
00:18:15.740The president created the idea of this Ukraine economic partnership.
00:18:23.460He was the first president not just to write blank checks for military aid.
00:18:28.660I could see that going into the Sovereign Fund and sitting on the balance sheet there because,
00:18:34.820Roger, this isn't the kind of thing that's going to produce big gains for the American taxpayer over the next couple of years.
00:18:47.820But if this terrible war in Ukraine is able to end, which the president is pushing hard for,
00:18:55.160and Ukraine rebuilds successfully, and I think because of the partnership with the U.S.,
00:19:00.180they would rebuild more successfully, this partnership could be worth in the hundreds of billions or over a trillion dollars.
00:19:09.480If you're just tuning in, folks, we're talking to Secretary of the Treasury Scott Bessett.
00:19:14.220You're in the Stone Zone and we'll be right back.