US Treasury Secretary Reconsiders from Scratch: "New Candidate" Wash... Besent is NEC Chairman

Donald Trump, the President-elect of the United States who has been rapidly announcing high-level appointments, is still deliberating over the position of Secretary of the Treasury, who will lead economic policy in his second administration. Trump, who has decided to reconsider from scratch, is reportedly considering appointing Kevin Warsh, a former Federal Reserve (Fed) governor and a 'new candidate,' as Treasury Secretary instead of Scott Vincent, CEO of Key Square Group, who was initially a strong contender and has been nominated as Chairman of the White House National Economic Council (NEC).

Kevin Warsh, former Federal Reserve (Fed) Board member. Fed website

Bloomberg News reported on the 18th (local time), citing sources, that Trump invited Warsh to his residence and the Mar-a-Lago resort in Florida, where the transition team is based. A source explained, "Warsh is expected to have an interview with Trump within a few days." Warsh, 52 years old this year, is a financial expert from Morgan Stanley and was previously considered a leading candidate for Fed Chair during Trump's first administration. He is also known domestically for serving as a director of Coupang Inc., the parent company of Coupang.

At the same time, Trump offered the NEC chairmanship to Vincent, who had been aiming for the Treasury Secretary position. Vincent's side reportedly responded that they would not accept the position until they know who will be nominated as Treasury Secretary. The news agency reported, "Trump is now considering the pairing of Warsh for Treasury and Vincent for NEC." Both Warsh and Vincent share the commonality of being from Wall Street, a background favored by Trump.

Originally, it was expected that Trump would announce the senior economic team appointments starting with the Treasury Secretary last week. However, Elon Musk, Tesla CEO and a close confidant of Trump, publicly supported Howard Lutnick, CEO of Cantor Fitzgerald, instead of Vincent last week. Amid mutual disparagement between the camps of the two candidates, it is now believed that neither will be nominated.

The news agency reported, "The internal strife between Vincent and Lutnick over the Treasury Secretary position annoyed Trump and ultimately delayed the decision." The Washington Post (WP) also reported that due to this internal conflict, Trump has begun looking for a third candidate. However, Vincent still remains a candidate for Treasury Secretary. Sources explained that Mark Rowan, CEO of asset management firm Apollo Global Management, and Kevin Hassett, who served in the first administration, are also among the candidates Trump is considering.

The New York Times (NYT) pointed out that Trump tends to value wealth and status from Wall Street for the Treasury Secretary position. The Treasury Secretary, fifth in the presidential line of succession, oversees the $28 trillion national debt market and more than 40 economic sanctions programs ranging from trade to banking. Especially in Trump's second administration, the Treasury Secretary is expected to lead trade wars, including up to 20% universal tariffs and high tariffs of 60% on Chinese goods. Accordingly, Trump's advisors are reportedly seeking commitments from Treasury Secretary candidates regarding tariff increases. After deciding on the Treasury Secretary, Trump is expected to finalize appointments for NEC Chairman, Secretary of Commerce, and U.S. Trade Representative (USTR), completing the economic team.

However, some concerns have been raised about whether Warsh is suitable for Trump's 'America First' agenda. In a joint editorial published in 2011 at the Hoover Institution, Warsh argued that policymakers "must resist the rising tide of economic protectionism." Having worked at investment bank Morgan Stanley and as White House economic policy advisor during the George W. Bush administration, he served as a Fed governor from 2006 to 2011. Since leaving the Fed, he has frequently criticized the Fed's monetary policy publicly. Recently, he claimed that the Fed lacks a consistent theory on inflation and called the September big cut (a 0.5 percentage point cut in the benchmark interest rate) a premature declaration of victory. He is also the husband of Jane Lauder Warsh, granddaughter of the Est?e Lauder founder.