The StoneZONE with Roger Stone - Scott Bessent ｜ 05-23-25

00:00:00.000 The Stone Zone on the Red Apple Podcast Network.

00:00:05.720 Welcome back in The Stone Zone.

00:00:08.320 I'm joined now by the 79th Secretary of the Treasury of the United States, Scott Bessett.

00:00:15.660 In his business career, Scott Bessett was widely recognized as one of the world's foremost macro hedge fund managers.

00:00:23.520 He's given that up to serve the American people.

00:00:26.340 Hello, Scott Bessett is a free thinker, a libertarian, strong supporter of digital currency.

00:00:33.040 But above all, he is a Trump loyalist who is playing a key role in implementing the president's strategy for the golden age.

00:00:42.660 Scott Bessett, welcome to The Stone Zone.

00:00:45.920 Roger, it's great to be on.

00:00:48.760 We're very honored to have you.

00:00:50.660 There's so much I want to ask you, but let's start here.

00:00:54.100 How do you see the implications for the passage of the new budget reconciliation bill, also known as the big, beautiful bill?

00:01:02.760 I think it may be.

00:01:03.960 I think it is the largest single tax cut in American history.

00:01:08.540 The president's critics keep pointing to, oh, this is going to balloon the deficit.

00:01:14.160 They don't understand economic growth.

00:01:16.380 Tell us the implications from your point of view.

00:01:18.280 Yeah, Roger, this one big, beautiful bill is the most important piece of legislation that's going to pass this year.

00:01:28.540 The president's economic agenda is the three-legged stool.

00:01:32.740 It's trade, it's taxes, and it's deregulation.

00:01:35.820 And all I hear as Treasury Secretary, all I hear from people who don't like the tariffs is uncertainty, uncertainty, uncertainty.

00:01:45.520 But then the same people who complain about uncertainty about the tariffs, they are trying to block this tax bill.

00:01:54.400 And I can tell you that the certainty that will come from this tax bill is the stimulus in and of itself.

00:02:00.440 And as you said, if you want to see a deficit blowout, don't pass this tax bill because the growth will collapse.

00:02:12.400 And this is the – we're making the 2017 Tax Cuts and Jobs Act permanent.

00:02:22.580 We are putting in full expensing for equipment and machinery.

00:02:28.480 We're putting in full expensing for factory structures.

00:02:32.780 So 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.

00:02:44.580 And 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.

00:03:00.740 And so, Roger, every Democrat who voted against this bill voted against a tax cut on Social Security, every single one of them.

00:03:16.620 Secretary, this morning I saw that you met with community bank leaders from both in and outside New York as well as small business owners.

00:03:25.060 What did you hear from them, and how is the Trump administration approaching small business overall?

00:03:31.420 One of the things I respect about you is you're a man who understands both Wall Street and Main Street.

00:03:36.100 I think this is particularly relevant at this time.

00:03:40.700 You know, Roger, when you're from Little River, South Carolina, and then move to Park Avenue, you understand Main Street and Wall Street.

00:03:50.500 And Wall Street's done great.

00:03:53.640 Now it's Main Street's turn to share in the prosperity.

00:03:56.980 Both can continue to – or both can do well.

00:04:00.100 It's not one or the other.

00:04:02.300 It's time for Main Street to play some catch-up.

00:04:05.000 And 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.

00:04:29.960 And I used to teach economic history, and the history is that when you have a crisis, there's always an overreaction.

00:04:39.980 And what these small bankers from mostly New York, but some from around the country, have told me is that this regulation is killing them.

00:04:49.520 They want to go out.

00:04:50.760 They want to help their communities.

00:04:52.240 70% 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.

00:05:09.840 And they're chomping at the bit to go.

00:05:12.440 They just need the right policies, which is what the Trump administration is trying to do.

00:05:18.460 The previous administration, as we know, was extraordinarily hostile to digital currency, cryptocurrency.

00:05:27.900 You have long been a proponent of it.

00:05:30.380 The president has embraced cryptocurrency as a vibrant industry in our country and an alternative monetary system.

00:05:39.300 Why is crypto, why is digital currency so important?

00:05:44.000 Well, Roger, it was even important as the Biden administration was trying to kill it.

00:05:53.340 What'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.

00:06:07.580 And it is important for the U.S. to be the leader because we will bring crypto and digital assets onshore.

00:06:16.980 We're going to have a thriving ecosystem here.

00:06:22.060 Everything from Bitcoin to stable coins and everything in between.

00:06:26.520 We're going to apply U.S. best regulatory practices, which is safe, sound, and smart.

00:06:35.080 And those will go out to the rest of the world.

00:06:38.040 These 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.

00:06:48.200 And the U.S. was getting left behind.

00:06:53.360 And fortunately, these companies and the crypto entrepreneurs persevered through what could have been an extinction phase the past four years.

00:07:05.020 And 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.

00:07:17.180 It's such an interesting combination to me as somebody who has studied fiscal policy and monetary policy.

00:07:26.320 And then you combine that with technology.

00:07:29.080 And the U.S. absolutely has to have the lead in this.

00:07:32.320 I think this is one of the most important and exciting things that the president is doing.

00:07:38.060 And it is you're absolutely right.

00:07:40.460 We need to be the world's leader.

00:07:43.300 You have in many ways been the point man for the Liberation Day tariff negotiations.

00:07:48.480 I saw that you were in Geneva meeting with the Chinese.

00:07:52.460 I saw some new announcements in that regard today.

00:07:56.140 I saw we had one down day in the market after the Liberation Day tariff negotiations.

00:08:01.320 And then the market bounced back nicely.

00:08:05.320 What is the latest in our tariff negotiations?

00:08:08.320 And how do you think we're doing?

00:08:11.360 I think we are doing very, very well.

00:08:16.220 And, Roger, you've known President Trump a lot longer than I have.

00:08:21.260 But 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,

00:08:41.380 and some of our adversaries or competitors or competitors, trade competitors, military competitors like China.

00:08:49.020 He's pushed hard on both of them to bring them to the table.

00:08:53.620 Your listeners should understand that there are 18 important trading relationships, and we are pushing those first.

00:09:04.320 We reached a deal very quickly with our oldest ally, the U.K.

00:09:10.380 It'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.

00:09:22.900 We went to, we had had an unfortunate escalatory phase with China, because on Liberation Day, we had said, do not escalate. 0.85

00:09:34.360 Come and bring us your offers.

00:09:37.620 And if you escalate, then we will raise the tariffs.

00:09:42.140 And the Chinese were the only ones who escalated. 1.00

00:09:43.900 We got up to, we were tariffing them at 145%.

00:09:48.580 They were tariffing us at 125%.

00:09:51.460 That created something akin to an embargo.

00:09:55.660 So we've got a 90-day pause here.

00:09:58.900 We both came down 115%.

00:10:01.420 We are at 30% for the 2025 tariffs.

00:10:06.920 They're at 10%.

00:10:08.260 But what's important to also remember, there were 20% tariffs on China from President Trump's first administration.

00:10:16.040 So we're really at 50%.

00:10:18.280 They're at 10%, which I think is a pretty good deal.

00:10:21.700 And they are negotiating hard, like they always do.

00:10:27.820 But we have good leverage over them.

00:10:30.240 Because the important thing to remember, Roger, is we are the deficit country.

00:10:35.700 That we have a trade deficit with China, the likes of which the world has never seemed. 0.86

00:10:42.920 So if trade gets cut off with them, then we lose some products.

00:10:51.560 They are the surplus country.

00:10:53.460 If our trade gets cut off with them, I think that if we hadn't done some kind of a deal,

00:11:00.460 they would have been laying off 10 or 20 million workers in the next few months.

00:11:05.700 This shrimp and coconut sauce is divine.

00:11:08.180 What's your secret?

00:11:09.140 Goya coconut milk.

00:11:10.280 How does it taste so good?

00:11:11.640 It's all in that real coconut flavor and that rich, creamy texture.

00:11:15.720 What about thickeners and added sugars?

00:11:17.960 None.

00:11:18.540 Just smooth, coconutty goodness.

00:11:21.020 What can I make with it?

00:11:22.080 From curries to sweet treats like coconut flan, the possibilities are endless.

00:11:27.540 Goya coconut milk.

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00:11:31.440 Find it in the Goya section of your local grocery store.

00:11:33.820 If it's Goya, it has to be good.

00:11:35.700 I think I read someplace that your target for the 10-year Treasury note was in the range of 3.9%.

00:11:44.180 Do you still think that is a realistic yield?

00:11:48.280 And how do you feel about that today?

00:11:49.980 I do because, again, Roger, the mainstream media is working with the Democrats to try to blow up the president's economic agenda.

00:12:04.600 And, you know, I feel like I am just dodging these crazy arrows that they're shooting all the time.

00:12:14.380 And the better the agenda gets, the crazier the things they say get.

00:12:19.600 So, last week, bond yields went up.

00:12:25.160 And they said, oh, it was because of the president's tax bill and this is what's going to happen to deficits.

00:12:31.220 Well, you know what?

00:12:32.700 Bond yields went up around the world.

00:12:35.920 And the Japan yields went up much higher on a percentage basis.

00:12:42.380 Same in Germany.

00:12:43.520 And I think once we see that there is not an inflationary impulse from the tariffs, that energy prices continue coming down.

00:12:54.620 A cousin of mine called me.

00:12:57.240 It was in Daytona Beach.

00:12:58.720 And he said, great job, Mr. Secretary.

00:13:02.100 The gasoline is at $1.93 and diesel is at $3.

00:13:07.300 I said, well, you know, I wish I could take credit for it.

00:13:10.220 But it's the market and it's the president's policy of energy independence.

00:13:16.420 And then other inflationary aspects, service inflation is coming down.

00:13:22.000 So, 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.

00:13:43.080 And that is what creates the golden age.

00:13:45.940 Mr. Secretary, do you think that the chairman of the Federal Reserve, Jerome Powell, should cut interest rates?

00:13:54.560 You 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.

00:14:06.840 I would only talk about all the ones that they have made, but I will.

00:14:14.800 I do think that inflation is under control, but growth is good.

00:14:24.920 Growth continues to surprise all the pundits and the naysayers.

00:14:30.820 The jobs numbers are strong.

00:14:33.080 The economic numbers are good.

00:14:34.900 So, we'll see what happens with rates.

00:14:40.560 Yeah, the president has said he believes that the Fed should cut rates, so neither you nor I need to say it.

00:14:46.720 I think the president is absolutely right.

00:14:49.720 How close are we to a bank deregulation deal?

00:14:53.200 Would that not make it easier for banks to hold those Treasury notes we spoke of?

00:14:58.480 Yes, I think we will get something over the summer.

00:15:03.560 There's a technical term called the supplementary leverage ratio.

00:15:08.280 And, Roger, I began my career on Wall Street in 1984 as a banks and insurance analyst.

00:15:15.320 So, I know how these Bs work from the inside and how bank regulation should work and could work.

00:15:25.380 And we are pushing to have this supplementary leverage ratio either reduced or removed.

00:15:32.720 And it will allow banks to buy more Treasuries.

00:15:37.700 And it's the craziest thing you've ever seen.

00:15:39.980 They're going to take a big capital charge for holding a risk-free asset.

00:15:43.840 So, during COVID crisis, there was an emergency lifting of the supplementary leverage ratio and caused rates to go down tens of basis points.

00:16:00.060 So, I think we could see anywhere from 30 to 60 basis point decrease in rates based on this over time.

00:16:10.460 That's very exciting.

00:16:12.260 The President had announced the creation of the Sovereign Wealth Fund as the administration's priorities include paying down the national debt.

00:16:22.340 For the time being, they have paused those plans.

00:16:25.120 There's plenty on the President's plate and on yours.

00:16:28.200 At what point will you feel comfortable about getting that fund up and running?

00:16:33.140 And what types of investments do you think it would make?

00:16:35.600 Well, Roger, the President is moving at breakneck pace.

00:16:44.280 Nobody knows that better than you.

00:16:46.380 But he's doing peace deals, trade deals, and tax deals.

00:16:50.220 And once those settle down, I would think that once we get over the hump and this deficit to GDP starts going down,

00:17:05.320 the total debt to GDP stabilizes and starts going down, and we are paying down debt,

00:17:12.340 then 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.

00:17:24.980 Because what I have observed, and I'm a professor, well, was a professor, too, of economic history is aside from my day job,

00:17:34.180 President Trump is the first president in centuries who wants to create assets for the American people and not debt for the American people.

00:17:48.660 So I think if on the backside of the American people, excuse me, in 26, 27, 28, we can stand up the Sovereign Wealth Fund,

00:18:05.660 it would be a great lasting legacy for a president who wanted to create assets.

00:18:10.960 And I could see a range of things being in it.

00:18:15.740 The president created the idea of this Ukraine economic partnership.

00:18:23.460 He was the first president not just to write blank checks for military aid.

00:18:28.660 I could see that going into the Sovereign Fund and sitting on the balance sheet there because,

00:18:34.820 Roger, this isn't the kind of thing that's going to produce big gains for the American taxpayer over the next couple of years.

00:18:47.820 But if this terrible war in Ukraine is able to end, which the president is pushing hard for,

00:18:55.160 and Ukraine rebuilds successfully, and I think because of the partnership with the U.S.,

00:19:00.180 they would rebuild more successfully, this partnership could be worth in the hundreds of billions or over a trillion dollars.

00:19:09.480 If you're just tuning in, folks, we're talking to Secretary of the Treasury Scott Bessett.

00:19:14.220 You're in the Stone Zone and we'll be right back.

The StoneZONE with Roger Stone - May 24, 2025

Scott Bessent ｜ 05-23-25

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