Scott Bessent, President-elect Donald Trump’s nominee for U.S. Treasury Secretary, will face two big challenges if confirmed by the Senate: Ensuring that the world’s largest government-debt market functions properly and pursuing a fiscal policy that doesn’t send the country’s debt-service costs soaring.
I wish him the best. Neither task will be as easy as stock and bond investors seem to believe.
It’s hard to overstate the importance of the market for U.S. Treasury securities. It provides a benchmark for the prices of stocks and bonds around the world and determines the cost of financing the U.S. budget deficit. To those ends, it must be deep and liquid — that is, able to handle large trading volumes without undue disruption or volatility.
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