Economist Peter Schiff has criticized President-elect Donald Trump‘s decision to pick hedge fund executive Scott Bessent as the new U.S. Treasury Secretary.
What Happened: According to his post on X (formerly Twitter), Schiff took a jibe at Trump and quipped that Bessent should be called the “Secretary of the Debt” instead of “Secretary of the Treasury.”
Schiff said the new Treasury Secretary’s job would be “to continue the Ponzi,” because Trump has promised tax cuts during his tenure.
As Treasury Secretary, Bessent will replace outgoing Secretary Janet Yellen, overseeing financial institutions and combating financial crimes at a time when the national debt has ballooned to $36 trillion.
It’s not just the ballooning deficit that is a cause of concern – the interest payments on this debt set the alarm bells ringing.
Billionaire investor Ray Dalio warned that the U.S. may have to resort to monetizing its debt, similar to Japan’s approach. This could lead to depreciated currency values and lower bond yields.
“I see a big depreciation in the value of that debt through a combination of artificial low real rates, so you won’t be compensated,” Dalio said.
The government has already spent $1 trillion on footing the interest bill on its national debt this year.
"In early 2024, the Fed cut its pace of quantitative tightening by $30 billion a month, which is just the amount they were letting roll off. And recently, Janet Yellen announced that she is going to buy $4 billion in U.S. Treasury bonds per week. There is just constant intervention by these entities whenever the yields start to spike. It's them trying to disallow any dysfunction or rather I would argue functioning in the Treasury markets."
Scott Bessent’s Holdings As Per 13F Filings
The latest third-quarter 13F filing from Bessent's Key Square Group fund shows that they have liquidated all their holding in the September quarter.
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