President-elect Donald Trump’s Treasury secretary pick, Scott Bessent, was expected by some to reignite the post-election rally that led to one of the best post-election equity rallies of all time.
Bessent was the consensus pick on Wall Street, which perhaps contributed to why Elon Musk called him the “business-as-usual” candidate for the job. Stocks rose after the long-awaited announcement and yields pulled back slightly.
But some investors are already cautioning that any relief rally could be short-lived, as Trump’s personnel picks still leave questions about economic policy under Trump 2.0.
“This was a good pick,” Jason Furman, a professor at the Harvard Kennedy School of Government and former economic adviser to President Barack Obama, told Yahoo Finance. “He’s mainstream. He knows a lot about the world of finance.”
“The bigger issue, though, is that the main calls on the economy are going to be President Trump’s,” Furman added.
Pangaea Policy founder Terry Haines published a note Monday cautioning that Trump appears to be casting a “team of rivals” on economic policy, meaning “Trump’s economic policy isn’t a settled thing.”
That team of rivals includes Musk and Vivek Ramaswamy, two Washington outsiders tapped to lead the Department of Government Efficiency, or DOGE, a new agency Trump and Musk came up with during a live conversation on X.
Furman added that the market is “ahead of itself” on the idea that Bessent will be able to curb any inflationary policies, noting he is “skeptical” of cost-cutting to come.
“President Trump sent us a bit of signal about how he’d make those calls with this pick, but he hasn’t sent us any signals that he’s given up on large across-the-board tariffs,” Furman said. “And until I hear that, I’m going to be nervous.”
Trump has promised a 60% tariff on Chinese goods. Costs from tariffs, which are taxes paid by companies when goods are imported from overseas, are largely passed down to consumers, which is why dozens of Nobel Laureates have warned that Trump’s tariff policies would be inflationary.
“Big ticket items like tariffs, like immigration policy, all that’s still coming out of the Oval Office,” said Isaac Boltansky, director of policy research at BTIG. “This is still going to be a presidency that is driven by what Trump wants and when Trump wants it.”
Read more: How do tariffs work, and who really pays them?
In an interview on Yahoo Finance in July, Bessent himself said that Trump’s 60% tariff line wasn’t too serious.