Bescent "Confession Bureau": Strongly promotes MAGA, but protects the market, Trump "always announces high tariffs to create leverage, then lowers them"

In just nine months in office, Secretary of the Treasury Steven Mnuchin—this 63-year-old American Treasury Secretary—has been responsible for advancing Trump's aggressive tariff agenda, leading reforms at the Federal Reserve, relaxing cryptocurrency regulations, and opening the door to tax cuts.

In an exclusive interview with the Financial Times, the Trump administration's Treasury Secretary and former hedge fund manager Steven Mnuchin elaborated on his core work philosophy:

“Maximize the implementation of ‘MAGA’ without upsetting the markets.”

Mnuchin stated in the interview that, unlike other unorthodox populist governments, he “has a healthy respect for the markets” and must “respect the markets.”

Regarding the Trump administration's global imposition of tariffs, which caused market turmoil, Mnuchin remarked that Trump's strategy “always starts with announcing high tariffs to create negotiation leverage, and then lowers them.” He commented:

“His (Trump's) risk tolerance is higher than mine.”

The Treasury Secretary Promoting MAGA, Squandering the Credibility of the Treasury?

As a key figure in Trump's cabinet responsible for the world's largest economy and its debt markets, Mnuchin has fully integrated the MAGA agenda into the U.S. Treasury. It is worth noting that during Trump's first term, the Treasury was seen as a bastion resisting Trump's policies.

This approach has earned him tremendous trust from the president. Pennsylvania Republican Senator David McCormick revealed:

“Trump has great confidence in him,” viewing him as “a rational voice” and “someone who can get things done.”

However, this approach has also drawn criticism. Media reports cite critics and former U.S. Treasury officials who argue that Mnuchin has not only undermined the Treasury's long-standing commitment to free-market orthodoxy on issues like trade, government intervention, and central bank independence but has also made it unprecedentedly partisan.

A former Treasury official warned that Mnuchin is “rapidly squandering” the Treasury's long-accumulated credibility, equivalent to gold:

“If the Treasury is seen as an overly politicized institution, it will lose credibility in the eyes of the markets, which will have serious and substantive consequences.”

In response, Mnuchin pointed to market data. Since he took office on January 28, the S&P 500 index has risen by about 12%, while the yield on the 10-year U.S. Treasury bond, a benchmark for long-term borrowing costs, has fallen by more than 0.5 percentage points to 4%. He views this as a strong rebuttal to critics warning that his policies would lead to inflation and a debt crisis.

“Where exactly is the market risk?” Mnuchin retorted firmly, “They are simply wrong.”

Are the Tariff "Master Plan" and "Mnuchin Put Options" Reliable?

When Trump announced large-scale tariffs in April this year, triggering a severe global market sell-off, Mnuchin was seen as a key figure in calming the storm.

He revealed to the Financial Times that the market turmoil was actually part of Trump's “master plan.” He explained that the president's strategy “always starts with announcing high tariffs to create negotiation leverage, and then lowers them.” Mnuchin stated:

"His (Trump's) risk tolerance is higher than mine."

This behind-the-scenes role of soothing the market has led many on Wall Street to view Bessent as a "safety valve" that buffers Trump's extreme impulses. He successfully persuaded the president not to fire Federal Reserve Chairman Powell before the end of his term and demonstrated a tough stance in conflicts with other government officials, further solidifying his image as someone willing to hold the line.

A Wall Street lobbyist stated, "At critical moments, he is a fighter for our camp." A term has even emerged in the market—"Bessent put," indicating that investors believe Bessent knows the bottom line for policy advancement and will not let the market fall into real chaos.

But is this confidence excessive? Former Treasury official Stephen Myrow believes that, unlike his predecessor Mnuchin, who tried to play a "guardrail" role, "Bessent has no qualms about politicization, which could ultimately pose risks to the market."

Some warning signs may have already appeared.

Since Bessent took office, the dollar exchange rate has fallen by about 8%. Bessent argues that the dollar will rebound as the trade deficit narrows. However, Democrats believe this reflects a loss of market confidence. Illinois Democratic Congressman Sean Casten stated:

"Two weeks ago, I met with bankers in New York, and one of them said it was the first time in his career he heard people discussing hedging the dollar. It's crazy."

Reshaping the Fed and Political Tools

Compared to previous Treasury secretaries, Bessent has taken a more public stance on intervening with the Federal Reserve. He fully supported Trump's attempt to fire Biden-nominated Fed Governor Lisa Cook and publicly accused Cook of mortgage fraud.

Additionally, Bessent published a lengthy 6,000-word article in International Economics, criticizing the Fed's quantitative easing and other non-standard monetary policies that maintain low interest rates, as well as its excessive expansion of regulatory functions in areas like climate, exceeding its mission.

Currently, he is leading the selection process for the next Federal Reserve chair and using the viewpoints from his article to challenge candidates. Regarding external criticisms of Trump's interference with the Fed's independence, Bessent is dismissive, citing attempts to influence Fed decisions during the Clinton administration as an example, stating that intervening with the central bank has "always been political."

The Financial Times analyzes that Bessent's ability to deeply promote the Maga agenda is closely tied to his solid political position. Reports indicate that he entered Trump's inner circle thanks to the support of former White House Chief Strategist Steve Bannon, which allowed him to establish a direct connection with the Maga base.

To maintain his position within the Maga camp, Bessent has demonstrated political cooperation at critical moments: when his deputy Michael Faulkender fell out of favor with the White House, Bessent ultimately did not oppose his sudden dismissal However, while Bessent is promoting the MAGA agenda, he also faces challenges from within. A multi-billion dollar rescue plan for Argentina that Bessent is trying to push has met with fierce opposition from allies within the MAGA camp, such as Congresswoman Marjorie Taylor Greene, who accused it of violating "MAGA" principles.

Ultimately, Bessent's true test will be whether he can help Trump deliver on the promise of an economic "golden age." Although he anticipates that productivity gains from artificial intelligence will drive economic growth, issues such as slowing job growth and stubborn inflation in the U.S. since 2025 remain. Polls show that Trump's approval ratings on economic management are not optimistic.

Regarding his role, Bessent summarized:

"My job is to provide the president with options and possible outcomes, and it is up to the president to decide how far to push things."