Feb 27 2025 4 mins
Scott Bessent, sworn in as the 79th Secretary of the Treasury on January 28, 2025, by Supreme Court Justice Brett M. Kavanaugh, has quickly immersed himself in the complexities of managing the U.S. government's finances and promoting economic growth. Following his swearing-in ceremony, Bessent was welcomed by department employees at the U.S. Treasury and began his first working day with meetings with senior Treasury officials.
As Secretary, Bessent is responsible for a wide-ranging mission that includes maintaining a strong economy, fostering economic growth, and creating job opportunities for all Americans. His extensive background in the global investment management business, spanning 40 years and involving interactions with international leaders and central bankers, positions him well for this role. Bessent has a reputation as a currency and fixed income specialist, having previously served as the Chief Executive Officer and Chief Investment Officer of Key Square Capital Management, a global hedge fund he founded in 2015, and as the Chief Investment Officer of Soros Fund Management.
Recently, the Treasury Department, under Bessent's leadership, has been navigating a complex fiscal landscape. The Treasury Borrowing Advisory Committee (TBAC) reviewed the Treasury's February 2025 Quarterly Refunding Presentation, highlighting key economic indicators and policy expectations. The report noted that despite softer growth in other regions, the U.S. continues to experience strong growth, with real GDP averaging 2.8% in 2024, driven by consumer spending and contributions from business and housing investment, albeit at a slower pace due to higher interest rates[1].
The TBAC also discussed the impact of the new Administration's policies, including a fiscal package aimed at lowering taxes and spending while raising new revenue through tariffs. This package is expected to influence Treasury issuance plans and market interest rates. Additionally, market sensitivity to trade policy, immigration policy, and deregulation remains high, as these factors can significantly affect growth and inflation outlooks[1].
In terms of specific actions, the Treasury has outlined its financing plans for the February to April 2025 quarter. This includes offering $125 billion of Treasury securities to refund approximately $106.2 billion of privately-held Treasury notes and bonds maturing on February 15, 2025. The securities to be auctioned include a 3-year note, a 10-year note, and a 30-year bond, with auctions scheduled for February 11, 12, and 13, respectively. These auctions are part of the Treasury's strategy to maintain nominal coupon and Floating Rate Note (FRN) auction sizes for at least the next several quarters[3].
The Treasury also plans to address any seasonal or unexpected variations in borrowing needs through adjustments in regular bill auction sizes and cash management bills (CMBs). Notably, the Treasury has been using extraordinary measures to finance the government since January 21, 2025, due to debt limit constraints, which will continue until the debt limit is suspended or increased[3].
Under Bessent's stewardship, the Treasury is also transitioning the 6-week CMB to benchmark status, with the first benchmark 6-week bill auction scheduled for February 18, 2025. This move is part of the Treasury's efforts to manage its financing requirements more effectively and respond to potential changes in the fiscal outlook[3].
These recent developments underscore the active and strategic role that Secretary Bessent and the Treasury Department are playing in managing the nation's finances and navigating the complex economic landscape.
As Secretary, Bessent is responsible for a wide-ranging mission that includes maintaining a strong economy, fostering economic growth, and creating job opportunities for all Americans. His extensive background in the global investment management business, spanning 40 years and involving interactions with international leaders and central bankers, positions him well for this role. Bessent has a reputation as a currency and fixed income specialist, having previously served as the Chief Executive Officer and Chief Investment Officer of Key Square Capital Management, a global hedge fund he founded in 2015, and as the Chief Investment Officer of Soros Fund Management.
Recently, the Treasury Department, under Bessent's leadership, has been navigating a complex fiscal landscape. The Treasury Borrowing Advisory Committee (TBAC) reviewed the Treasury's February 2025 Quarterly Refunding Presentation, highlighting key economic indicators and policy expectations. The report noted that despite softer growth in other regions, the U.S. continues to experience strong growth, with real GDP averaging 2.8% in 2024, driven by consumer spending and contributions from business and housing investment, albeit at a slower pace due to higher interest rates[1].
The TBAC also discussed the impact of the new Administration's policies, including a fiscal package aimed at lowering taxes and spending while raising new revenue through tariffs. This package is expected to influence Treasury issuance plans and market interest rates. Additionally, market sensitivity to trade policy, immigration policy, and deregulation remains high, as these factors can significantly affect growth and inflation outlooks[1].
In terms of specific actions, the Treasury has outlined its financing plans for the February to April 2025 quarter. This includes offering $125 billion of Treasury securities to refund approximately $106.2 billion of privately-held Treasury notes and bonds maturing on February 15, 2025. The securities to be auctioned include a 3-year note, a 10-year note, and a 30-year bond, with auctions scheduled for February 11, 12, and 13, respectively. These auctions are part of the Treasury's strategy to maintain nominal coupon and Floating Rate Note (FRN) auction sizes for at least the next several quarters[3].
The Treasury also plans to address any seasonal or unexpected variations in borrowing needs through adjustments in regular bill auction sizes and cash management bills (CMBs). Notably, the Treasury has been using extraordinary measures to finance the government since January 21, 2025, due to debt limit constraints, which will continue until the debt limit is suspended or increased[3].
Under Bessent's stewardship, the Treasury is also transitioning the 6-week CMB to benchmark status, with the first benchmark 6-week bill auction scheduled for February 18, 2025. This move is part of the Treasury's efforts to manage its financing requirements more effectively and respond to potential changes in the fiscal outlook[3].
These recent developments underscore the active and strategic role that Secretary Bessent and the Treasury Department are playing in managing the nation's finances and navigating the complex economic landscape.