Evelyn Reynolds

More stories

  • 138 Shares199 Views

    in Economy

    Donald Trump chooses hedge fund executive Scott Bessent for Treasury secretary

    President-elect Donald Trump signaled Friday his intention to nominate hedge fund executive Scott Bessent as his Treasury secretary.
    Trump in a statement called the prospective nominee “one of the World’s foremost International Investors and Geopolitical and Economic Strategists.”
    Trump’s decision to name Bessent to the key position follows a week of intense speculation about who would win out.

    Scott Bessent, founder and chief executive officer of Key Square Group LP, during an interview in Washington, DC, US, on Friday, June 7, 2024.
    Stefani Reynolds | Bloomberg | Getty Images

    President-elect Donald Trump signaled Friday his intention to nominate hedge fund executive Scott Bessent as his Treasury secretary, in a move that puts a seasoned market pro and a close Trump loyalist in a critical economic position.
    The founder of Key Square Group had been considered a strong favorite for the position along with a few other close contenders including former Fed Governor Kevin Warsh and private equity executive Marc Rowan.

    As head of Treasury, Bessent, 62, will be both the U.S. fiscal watchdog as well as a key official to help Trump enact his ambitious economic agenda. Both a Wall Street heavyweight and advocate for many of the incoming president’s economic goals, he would come to office at a critical time as the U.S. wrestles with a growing economy alongside long-festering debt and deficit issues.
    Trump in a statement called the prospective nominee “one of the World’s foremost International Investors and Geopolitical and Economic Strategists. Scott’s story is that of the American Dream.”
    Like Trump, Bessent favors gradual tariffs and deregulation to push American business and control inflation. In addition, he has advocated for a revival in manufacturing as well as energy independence.
    “If you’re going to think about the market and think about what matters, the guy is brilliant,” said a source familiar with Trump’s thinking who spoke on condition of anonymity to talk frankly about the matter. “There aren’t many people who know the market better than Bessent does.”
    The prospective nominee also has deep philanthropic ties through Yale University along with Rockefeller University and the Classical American Homes Preservation Trust.

    One obstacle Bessent will have to overcome is his past affiliation with billionaire investor and global progressive gadfly George Soros. He served as chief investment officer for Soros’ fund.
    Trump, though, said Bessent “will support my Policies that will drive U.S. competitiveness, and stop unfair Trade imbalances.”
    Trump’s decision to name Bessent to the key position follows a week of intense speculation about who would win out. Over the past day, the Wall Street Journal posted a report suggesting that Warsh could get the job, then work there until mid-2026 when he would slide over to the Federal Reserve and take the chair at the central bank after Jerome Powell’s term expires.
    Putting Bessent in the Treasury job could then clear the way for Warsh eventually to take over at the Fed, though he also is thought to be a contender to head the National Economic Council.
    The Treasury secretary is the lynchpin for the White House economic agenda.
    Bessent will be Trump’s key advisor on fiscal issues while managing a financial situation that has seen debt and deficits swell in recent years. The U.S. has a total debt of more than $36 trillion, of which $28.7 trillion is owed by the public. The deficit is expected again to approach $2 trillion in fiscal 2025, with debt service payments projected around $1.2 trillion.
    In addition, he will be responsible for helping to supervise financial institutions and lead the battle against financial crimes. He would replace outgoing Secretary Janet Yellen, who had previously served as Fed chair, the first woman ever to assume either role.
    Not everybody around Trump has been happy with his interest in Bessent.
    Trump confidante Elon Musk last week endorsed Cantor Fitzgerald chief Howard Lutnick. Others close to the president-elect think Bessent has not been rigorous enough in his support for tariffs, though Warsh also has made public statements against the levies. More

  • 175 Shares159 Views

    in Economy

    Trump might name Kevin Warsh as Treasury chief then Fed chair later, report says

    Kevin Warsh
    Jin Lee | Bloomberg | Getty Images

    President-elect Donald Trump is considering naming Kevin Warsh as Treasury secretary then ultimately sending him off to serve as Federal Reserve chair, according to a Wall Street Journal report.
    A former Fed governor himself, Warsh would move over to the central bank after current Chair Jerome Powell’s term expires in 2026, according to the Journal, which cited sources familiar with Trump’s thinking.

    The speculation comes with Treasury being the last major Cabinet position for which Trump has yet to state his intention.
    Various reports have put Warsh as one of the finalists with Apollo Global Management CEO Marc Rowan and hedge fund manager Scott Bessent. Among the potential scenarios would be one where Bessent would lead the National Economic Council initially then go over to Treasury after Warsh takes over at the Fed.
    However, Trump is known for the propensity to change his mind, and the report noted that nothing has been finalized.
    Read the full Wall Street Journal story here. More

  • 100 Shares109 Views

    in Economy

    Why Trump Allies Say Immigration Hurts American Workers

    JD Vance and others on the “new right” say limiting immigration will raise wages and give jobs to sidelined Americans. Many studies suggest otherwise.As President-elect Donald J. Trump’s second administration takes shape, his plans for a signature campaign promise are becoming clear: mass deportations of undocumented immigrants, including new detention centers, workplace raids and possibly the mobilization of the military to aid in expulsions.Most economists are skeptical that this project will improve opportunities for working-class Americans. Mr. Trump and his allies don’t typically argue for purging undocumented immigrants on economic grounds; the case is more often about crimes committed by migrants, or simply a need to enforce the law.But there is an intellectual movement behind immigration restriction that seeks to reshape the relationship between employers and their sources of labor. According to this rising conservative faction, most closely identified with Vice President-elect JD Vance, cutting off the supply of vulnerable foreigners will force employers to seek out U.S.-born workers.“We cannot have an entire American business community that is giving up on American workers and then importing millions of illegal laborers,” Mr. Vance said in an interview with The New York Times in October, adding, “It’s one of the biggest reasons why we have millions of people who’ve dropped out of the labor force.”Mr. Vance is correct that the share of men in their prime working years who are in the labor force — that is, either working or looking for work — has declined in recent decades, sliding during recessions and never totally recovering. (Women in that age group, 25 to 54 years old, are working at the highest levels on record.)It seems like a simple equation: When fewer workers are available, employers have to try harder to compete for them. Certainly that dynamic played a role in the swift wage growth early in the pandemic, when people willing to do in-person jobs — waiters or nurses, for example — were in especially short supply.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • 150 Shares99 Views

    in Economy

    Logging Is the Deadliest Job, but Still an Oregon Way of Life

    In southwestern Oregon, semi trucks loaded with logs snake along roads through dark, lush forests of Douglas fir. The logging industry has shaped and sustained families here for generations.A steady demand for lumber and a lack of other well-paying jobs in rural parts of the state have made logging one of the most promising career paths.It also comes with grave risk.A glossary of logging terms includes an entry for heavy broken branches that can fall without warning: widowmakers.Inside the Deadliest Job in AmericaMostly employed in densely forested pockets of the Pacific Northwest and the South, loggers have the highest rate of fatal on-the-job injuries of any civilian occupation in the nation, outpacing roofers, hunters and underground mining machine operators.About 100 of every 100,000 logging workers die from work injuries, compared with four per 100,000 for all workers, according to the Bureau of Labor Statistics.Logs stacked for shipment at a port in North Bend, Ore.“There is a mix of physical factors — heavy equipment and, of course, the massive trees,” said Marissa Baker, a professor of occupational health at the University of Washington who has researched the logging industry. “Couple that with steep terrain and unforgiving weather and the rural aspect of the work, and it leads to great danger.”In the most rural stretches of Oregon, where swaths have been scarred by the clear-cutting of trees, many workers decide the risk is worth it. Most loggers here earn around $29 an hour. And average timber industry wages are 17 percent higher than local private-sector wages, according to a recent report from the Oregon Department of Administrative Services.Logging operates mostly year round, with workers usually bouncing among companies — sometimes called outfits — where pay can vary according to the specific job that needs to be done. But the industry has declined steeply since the 1990s, partly because of competition from other countries, including Brazil and Canada, and years of legal battles as conservationists seek to limit logging in old-growth forests.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • 188 Shares129 Views

    in Economy

    Trump and Fed Chair Powell could be set on a collision course over interest rates

    Should inflation flare up again, Fed Chair Jerome Powell and his colleagues could tap the brakes on their efforts to lower interest rates. That in turn could infuriate President-elect Donald Trump.
    Futures traders have been waffling in recent days on their expectations for what the Fed will do next.
    “All roads lead to tensions between the White House and the Fed,” said Joseph Brusuelas, chief economist at RSM.

    Jerome Powell and President Donald Trump during a nomination announcement in the Rose Garden of the White House in Washington, D.C., U.S., on Thursday, Nov. 2, 2017.
    Andrew Harrer | Bloomberg | Getty Images

    President-elect Donald Trump and Federal Reserve Chair Jerome Powell could be on a policy collision course in 2025 depending on how economic circumstances play out.
    Should the economy run hot and inflation flare up again, Powell and his colleagues could decide to tap the brakes on their efforts to lower interest rates. That in turn could infuriate Trump, who lashed Fed officials including Powell during his first term in office for not relaxing monetary policy quickly enough.

    “Without question,” said Joseph LaVorgna, former chief economist at the National Economic Council during Trump’s first term, when asked about the potential for a conflict. “When they don’t know what to do, oftentimes they don’t do anything. That may be a problem. If the president feels like rates should be lowered, does the Fed, just for public optics, dig its feet in?”
    Though Powell became Fed chair in 2018, after Trump nominated him for the position, the two clashed often about the direction of interest rates.
    Trump publicly and aggressively berated the chair, who in turn responded by asserting how important it is for the Fed to be independent and apart from political pressures, even if they’re coming from the president.
    When Trump takes office in January, the two will be operating against a different backdrop. During the first term, there was little inflation, meaning that even Fed rate hikes kept benchmark rates well below where they are now.
    Trump is planning both expansionary and protectionist fiscal policy, even more so than during his previous run, that will include an even tougher round of tariffs, lower taxes and big spending. Should the results start to show up in the data, the Powell Fed may be tempted to hold tougher on monetary policy against inflation.

    LaVorgna, chief economist at SMBC Nikko Securities, who is rumored for a position in the new administration, thinks that would be mistake.
    “They’re going to look at a very nontraditional approach to policy that Trump is bringing forward but put it through a very traditional economic lens,” he said. “The Fed’s going to have a really difficult choice based on their traditional approach of what to do.”

    Market sees fewer rate cuts

    Futures traders have been waffling in recent days on their expectations for what the Fed will do next.
    The market is pricing in about a coin-flip chance of another interest rate cut in December, after it being a near-certainty a week ago, according to the CME Group’s FedWatch. Pricing further out indicates the equivalent of three quarter-percentage-point reductions through the end of 2025, which also has come down significantly from prior expectations.
    Investors’ nerves have gotten jangled in recent days about the Fed’s intentions. Fed Governor Michelle Bowman on Wednesday noted that progress on inflation has “stalled,” an indication that she might continue to push for a slower pace of rate cuts.
    “All roads lead to tensions between the White House and the Fed,” said Joseph Brusuelas, chief economist at RSM. “It won’t just be the White House. It will be Treasury, it’ll be Commerce and the Fed all intersecting.”
    Indeed, Trump is building a team of loyalists to implement his economic agenda, but much of the success depends on accommodative or at least accurate monetary policy that doesn’t push too hard to either boost or restrict growth. For the Fed, that is represented in the quest to find the “neutral” rate of interest, but for the new administration, it could mean something different.
    The struggle over where rates should be will create “political and policy tensions between the Federal Reserve and the White House that would clearly prefer lower rates,” Brusuelas said.
    “If one is going to impose tariffs, or mass deportations, you’re talking about restricting aggregate supply while simultaneously implementing deficit finance tax cuts, which is encouraging an increase in aggregate demand. You’ve got a basic inconsistency in your policy matrix,” he added. “There’s an inevitable crossroads that results in tensions between Trump and Powell.”

    Avoiding conflict

    To be sure, there are some factors that could mitigate the tensions.
    One is that Powell’s term as Fed chair expires in early 2026, so Trump may simply choose to ride it out until he can put someone in the chair more to his liking. There’s also little chance that the Fed would actually move to raise rates outside of some highly unexpected event that would push inflation much higher.
    Also, Trump’s policies will take a while to make their way through the system, so any impacts on inflation and macroeconomic growth likely won’t be readily apparent in the data, thus not necessitating a Fed response. There’s also the chance that the impacts might not be that much either way.
    “I expect higher inflation and slower growth. I think the tariffs and the deportations are negative supply shocks. They hurt growth and they lift inflation,” said Mark Zandi, chief economist at Moody’s Analytics. “The Fed will still cut interest rates next year, just perhaps not as quickly as would have otherwise been the case.”
    Battles with Trump, then, could be more of a headache for the next Fed chair, assuming Trump doesn’t reappoint Powell.
    “So I don’t think it’s going to be an issue in 2025,” Zandi said. “It could be an issue in 2026, because at that point, the rate cutting’s over and the Fed may be in a position where it certainly needs to start raising interest rates. Then that’s when it becomes an issue.” More

  • 150 Shares169 Views

    in Economy

    Is Trump More Flexible on China Than His Hawkish Cabinet Picks Suggest?

    President-elect Donald J. Trump is assembling a team of aides bent on confrontation with China. But he also has advisers who do business there, including Elon Musk.They are the new class of cold warriors, guns pointed at China.President-elect Donald J. Trump has chosen cabinet secretaries and a national security adviser who stress the need to confront China across the entire security and economic spectrum: military posture, trade, technology, espionage, human rights and Taiwan.Those choices could open a new era of conflict with a nuclear-armed nation that has the world’s largest standing army and second-largest economy, and where many top officials see the United States as a superpower in decline.Mr. Trump’s hawkish advisers so far include Marco Rubio, a Florida senator named as secretary of state; Michael Waltz, a Florida congressman tapped for national security adviser; and Pete Hegseth, a former Fox News television personality designated to be defense secretary. Cabinet secretaries must be confirmed by the Senate, although Mr. Trump has floated the idea of getting around that by using recess appointments.Those men are more explicitly hostile to China than their counterparts in the Biden administration, though President Biden has taken an aggressive tack with China and continued some of the policies from Mr. Trump’s first term. A consensus has solidified among Democrats and Republicans in Washington that China must be constrained because it is the nation most capable of upending American global dominance.Yet there are signs that Mr. Trump might consider a more moderate approach on trade, perhaps to avoid upsetting a roaring stock market nurtured by Mr. Biden.Mr. Trump with President Xi Jinping of China in Beijing in November 2017. Mr. Trump hosted Mr. Xi at Mar-a-Lago earlier that year, but their budding relationship eventually fell apart over a trade war that Mr. Trump started.Doug Mills/The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • 125 Shares99 Views

    in Economy

    How Trump’s Tax Cuts and Tariffs Could Turn Into Law

    Republicans are juggling complex political and tactical questions as they plan their congressional agenda next year.Republicans are starting to sketch out how to translate President-elect Donald J. Trump’s economic agenda into law, putting plans in place to bypass Democrats and approve multiple bills reshaping the nation’s tax and spending policies along party lines.With total control of Washington, Republicans have the rare — and often fleeting — opportunity to leave a lasting mark on federal policy. Some in the party are hoping to tee up big legislation for early next year and capitalize on Mr. Trump’s first 100 days.Much of the early planning revolves around the sweeping tax cuts the party passed and Mr. Trump signed into law in 2017, many of which will expire at the end of next year. Key Republicans are holding meetings about how to maneuver a bill extending the tax cuts through the Senate, while others are consulting economists for ideas to offset their roughly $4 trillion cost.Several questions loom over the Republican effort. They range from how fast the party should move next year to deeper political disagreements over which tax and spending policies to change. The overall cost of the legislation is a central preoccupation at a time of rising deficits. And whatever Republicans put together will most likely become a magnet for other issues the party has prioritized, including immigration.Here’s what to expect.A Difficult ProcessMost legislation needs a supermajority of 60 votes to pass the Senate. But for bills focused on taxes and spending, lawmakers can turn to a process called budget reconciliation that requires only a regular majority of 51 votes in the Senate.Reconciliation is a powerful but cumbersome tool. Its rules prevent lawmakers from passing policy changes unrelated to the budget, and lawmakers are only allowed to use reconciliation a limited number of times per year. Republicans could also raise the debt limit through the process.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • 100 Shares179 Views

    in Economy

    Walmart Sees ‘Momentum’ Ahead of Holiday Shopping Season

    The company, a bellwether for the retail industry, said its U.S. sales rose 5 percent in the third quarter, as cost-conscious consumers of all incomes sought bargains.Walmart has told its workers that it plans to “win” the holiday season. Ahead of the peak shopping period, the nation’s largest retailer appears well positioned, citing “broad-based strength” across its product range.Walmart said Tuesday that U.S. sales increased 5 percent in the third quarter, to $114.9 billion, easily surpassing analysts’ estimates. Its U.S. e-commerce business jumped 22 percent, aided by pickup and delivery options and its expanding online advertising and marketplace business.Operating profit for the quarter rose 9.1 percent at the retailer’s U.S. unit. Walmart raised its full-year forecast for sales and profit, higher than the estimates it had already increased last quarter.Doug McMillon, Walmart’s chief executive, said the company had “momentum.”“In the U.S., in-store volumes grew, pickup from store grew faster, and delivery from store grew even faster than that,” he said in a statement Tuesday.Walmart, which brings in millions of customers each week, is a bellwether of U.S. consumer trends. The period between Thanksgiving and New Year can make or break a retailer’s year, and companies are unsure about how freely shoppers will spend in the weeks ahead.Stung by inflation, consumers have shown that they are looking for low prices and convenience, such as free or fast shipping. The squeeze has been acute on lower-income shoppers, a core customer base for Walmart, and more higher-income customers have been trading down to Walmart in recent years. Walmart said those more affluent shoppers continued to buoy sales in its latest quarter.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More