President-elect Donald Trump has filled several high-level Cabinet positions in the two weeks since Election Day. The announcements have been riveting and popcorn entertainment from Matt Gaetz as Attorney General to Tulsi Gabbard as the Director of National Intelligence. But one senior administration role is leaving Wall Street in suspense and stopping investors from staring at their Bloomberg trading terminals: Janet Yellen’s successor as Treasury Secretary.
Who Will Trump Pick?
The next Treasury Secretary will have his or her plate full. The individual will have to order dozens of pizza boxes for members of Congress to avert a default as the national debt ceiling expires. The incoming person will need to help extend the Tax Cut and Jobs Act. And this is just the near-term list. The top role in Washington will also be required to espouse Trump’s tariff plans, advocate for pro-cryptocurrency legislation, tackle record budget deficits, and read through the DOGE (Department of Government Efficiency) list of budget cuts.
So, who is Trump considering for this position? According to a plethora of media reports and the betting website Polymarket, there are four top contenders: Howard Lutnick, Scott Bessent, Kevin Warsh, and Marc Rowan.
Lutnick presently serves as the Trump transition co-chair, and he loves tariffs and Bitcoin. Bessent is a hedge fund billionaire who also adores tariffs and Bitcoin and earned his fortune alongside George Soros. Kevin Warsh is a former Federal Reserve Board governor who was first considered to lead the central bank in 2017 before it was given to Jerome Powell (he is still thought to be the main candidate to succeed Powell in 2026). Marc Rowan is another Wall Street veteran who has enjoyed a low political profile.
The Wall Street favorite is Bessent, but Lutnick received the endorsement of billionaire Elon Musk and Robert F. Kennedy Jr. Warsh emerged at second on the betting markets out of nowhere as Trump reportedly expanded his list of candidates to helm the Treasury. Rowan is a distant fourth.
No matter who is tapped to lead the Treasury Department, the incoming secretary will seek to employ the president-elect’s economic agenda.
Sorry, Paul Krugman, Inflation Hurts the Poor
At the onset of the inflation bomb, Keynesian economist Paul Krugman purported that inflation impacts the affluent rather than the impecunious. “’Inflation especially hurts the poor’ has truthiness — it sounds like it should be true. But I don’t see either evidence or a mechanism,” he said on X in December 2021.
Of course, anyone possessing an ounce of common-sense economics will realize that higher prices and a reduction in purchasing power will shock those in poverty more than a household earning six or seven figures a year. That said, new research confirms that, yes, inflation devastates the poor more than the rich.
Minneapolis Fed economists published a recent paper titled “Lower income, higher inflation? New data bring answers at last.” They concluded that “low-income households experience roughly 10 percent higher inflation over time than highest-income households,” adding that “surveys show much greater pain felt by low-income households.”
Indeed, you did not need economists to convey this information. However, these findings are worthwhile for data-dependent individuals and organizations because they highlight that price pressures and debasing currencies harm the less fortunate in society. Perhaps it will prevent Washington from embarking upon expansive fiscal policies and stop the Eccles Building from launching the printing press to solve America’s ailments.
So Close …
The US government is close to unlocking the $36 trillion milestone. According to the Treasury Department’s Nov. 14 Debt-to-the-Penny dashboard, the national debt stands at $35,965,533,024,604.05. The ascent to $36 trillion has been a terrifying yet hilarious ride because Washington hit the $35 trillion mark a little more than three months ago. To be exact, the national debt touched $35,001,278,179,208.67 on July 26.
It took America 200 years to register its first $1 trillion in IOUs. Will DOGE make it so that the US government stops borrowing $1 trillion every three months or so? Elon Musk and Vivek Ramaswamy may need to find more than $20,000 for drag queen events in Ecuador and $500,000 for transgender monkey research.
