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Former senior economic adviser to the US president: Trump wants the dollar to remain the world's reserve currency

2024-10-14

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The Financial Times reported on Monday (October 14) that a senior economic adviser to former US President Donald Trump refuted concerns that Trump would weaken the dollar or reduce trade if he was re-elected, insisting that Trump wanted the dollar to remain the world's reserve currency and use tariffs as a negotiating strategy.

Scott Bessent, a 62-year-old hedge fund manager, once made a fortune by shorting the yen and the pound for financial tycoon George Soros.

The Financial Times believes that Bessent's remarks are meaningful because he has become Trump's senior adviser on economics and finance in recent years.

Although Bessent did not serve in the Trump administration from 2017 to 2021, he donated more than $2 million to Trump's campaign in 2024 and co-hosted fundraising events in the United States and London.

Bessent is often considered a possible US Treasury Secretary if Trump returns to the White House.

Trump and his running mate, JD Vance, have previously called for a weaker dollar to boost U.S. exports, despite the cost to U.S. consumers of foreign goods.

But in an interview with the Financial Times, Bessant said he expected a possible new Trump administration to support a strong dollar, in line with decades of U.S. policy, and would not deliberately try to devalue the dollar.

Bessant claimed that Trump "supports the U.S. as a reserve currency" and "reserve currencies can go up and down based on the market. I believe that if you have good economic policies, you will naturally have a strong dollar."

However, Bessant warned that he did not speak for Trump.

Bessant also defended Trump's promise to impose comprehensive tariffs on imports, including tariffs of up to 20% on all goods. He said these were "extremist" positions that could be diluted in negotiations with trading partners.

"My overall view is that, at the end of the day, Trump is a free trader. This will be a process of escalation to de-escalation," Bessant said.

Bessant added that Trump will appoint a new Fed chairman but will not interfere with the Fed's independence. Jay Powell, the current Fed chairman, is due to hold office in 2026.

Some worry that if Trump wins the presidential election, he could politicize the Fed.

"Trump will make his views known," Bessant said. "I think what's different about Trump is that he's a businessman and he understands economics."

In fact, Michael Feroli, chief U.S. economist at JPMorgan Chase, said in a report last week that even if Trump wants to weaken the dollar, it may be difficult. Both the independence of the Fed and Trump's lack of cooperation with other countries may hinder the Trump administration's efforts to weaken the dollar.

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Former senior economic adviser to the US president: Trump wants the dollar to remain the world's reserve currency

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