Experts say that with Scott Bessent being selected as the Secretary of the Treasury in the usa, the question now is what he can do to curb consumer living costs (including prices and interest rates) and increase household income.

If Bessent's nomination is confirmed, this founder of the hedge fund Key Square Group will effectively become the chief financial officer of the federal government, wielding power at a crucial moment that will impact the financial lives of americans.

With Trump's tariff plan, a major tax bill, and the imminent expiration of the suspension of the debt ceiling in 2025, Bessent will become a key economic spokesperson.

Stephen Myrow, managing partner at Beacon Policy Advisors, stated that Bessent's credibility in the financial markets can help the government sell the idea of raising tariffs to investors—even if those costs are passed on. "Tariffs will translate to consumer costs. The question is how much. Time will tell," he said.

However, Ed Mills, a policy analyst at Raymond James in washington, indicated that the timing and scope of the tariff increases remain uncertain. Mills said the losses to consumers from tariffs will depend on how much resistance Trump encounters within his cabinet.

For Bessent, Trump, and republican lawmakers, a larger question is how much further they are willing to expand on a national debt scale of 36 trillion dollars.

Since mid-September, us treasury yields have been rising, which many believe reflects the bond market's expectations for economic growth and the anticipated deficits and inflation during Trump's second term. These treasury yields are crucial for consumers as they set the interest rates for various types of crediting.

FHN Financial macro analyst Will Compernolle wrote in a client report on Monday that the market sees Becerra as a reliable choice, believing he will be a steady hand at the Treasury.

Compernolle pointed out that US Treasury yields fell on Monday, as market participants viewed Becerra as a "fiscal hawk," expecting him to warn against aggressively expanding the budget deficit.

Morningstar's senior US economist Preston Caldwell stated that the Treasury Secretary's indirect power in influencing fiscal and economic policy may be more important than his direct power.

Tax cut: Becerra's confirmation hearing is worth anticipating.

First, starting with taxes. If all goes well, Becerra will take over as Treasury Secretary next year, as Trump's 2017 tax cut law is set to expire. According to the American Tax Foundation, by 2026, the law will be fully ineffective, and 62% of households will face tax increases. The Congressional Budget Office stated that directly extending the existing law could increase the deficit by over 4 trillion dollars.

Of course, any new tax law depends on Congress and Trump. But Idaho Republican Senator and incoming chairman of the Senate Finance Committee Mike Crapo noted in a statement that Becerra will be the "key economic negotiator" for the White House.

Crapo expressed anticipation for the confirmation hearing. Mills is also looking forward to that day. "Regarding specific tax policies, we will have to wait for the confirmation hearing to know exactly what he wants to do," he said.

The impact on consumer borrowing costs is limited.

Experts indicate that when it comes to consumer lending costs, Besant pays close attention to this issue, but what he can do is limited. Trump made the cost of living a key issue during his campaign.

Cris DeRitis, deputy chief economist at Moody's Analytics, stated that the Federal Reserve's federal funds rate sets the benchmark for short-term rates, including the floating annual rate for credit cards. However, he pointed out that U.S. Treasury yields set the benchmark for long-term credit, such as mortgages, auto loans, and federal student loans. He added that they also influence the interest rates paid by banks on long-term certificates of deposit (CDs).

Since mid-September, U.S. Treasury yields have been rising. This is why mortgage rates are starting to approach 7%, even though the Federal Reserve has begun to lower the benchmark rate.

Why have U.S. Treasury yields risen? DeRitis stated that the main theory is that the bond market sees an increased possibility of Trump winning and is digesting the inflation impact of potential tariffs, more tax cuts, and mass deportation of illegal immigrants.

U.S. Treasury yields move inversely to prices. DeRitis stated that Besant's tool for adjusting rates would be to modify the combination of short-term and long-term debt used to finance the federal deficit.

Of course, in the massive U.S. Treasury market, this concerns a tricky supply and demand issue.

Caldwell indicated that by adjusting the maturity mix of issued bonds, Besant "can theoretically change the shape of the yield curve," but this may have a small impact, and if the Federal Reserve is willing, it could easily offset this by adjusting its long-term asset portfolio. The Federal Reserve is also a major buyer and seller of U.S. Treasuries.

As the yield on one-year Treasury bonds gradually exceeds that of two-year and 10-year Treasury bonds, Besant stated that the current Treasury Secretary Yellen "borrowed more than 1 trillion dollars in shorter-term bonds at costs above historical standards, distorting the Treasury market."

After Trump was elected president of the USA, Besant wrote in the Wall Street Journal that, "Ending the debt and adopting a more orthodox borrowing method may drive up long-term interest rates, which requires skillful handling."

Meyer stated that so far, Besant's understanding of the bond market only satisfies the government and consumers sensitive to interest rates. "The question is how much the Trump administration can leverage Besant's credibility to prevent a negative reaction from the bond market."

Mills noted that Besant's background slightly reduced this risk, which helps consumers purchase loans, even if they are not focused on the bond market.

Adopting "unconventional measures" to address the debt ceiling issue and play a role in other legislation.

According to Veda Partners managing partner Henrietta Treyz, the USA debt ceiling will need to be raised again around July next year. She mentioned that the Republican plan may be to link the increase of the debt ceiling with the passage of the tax legislation.

If these two issues are linked, Besant and the Treasury may need to secure some time for lawmakers by implementing "unconventional measures" to delay the debt default date. Deritis stated, "Unconventional measures" essentially involve the Treasury strategically easing certain expenditures to slow the speed at which the government approaches its borrowing limit.

Besant will also play an important role in the regulation of cryptos as the status of this asset class becomes more prominent.

The Financial Crimes Enforcement Network (FinCEN), part of the Treasury, was one of the first federal regulatory agencies to regulate the digital asset industry. It requires$Coinbase (COIN.US)$Cryptocurrency companies are required to register their transfer business with the regulatory institutions and comply with federal anti-money laundering laws and know-your-customer laws. Last November, Binance and its founder Changpeng Zhao were criminally prosecuted for violating these laws.

FinCEN is an important participant in the government's fight against terrorism, drug trafficking, and other international crimes. Analysts say that the new government is unlikely to go easy on the industry when enforcing these laws.

Andrew O'Neill, managing director of s&p global ratings for digital assets, stated that as a maker of government financial regulatory policy, the new Treasury Secretary may assist cryptocurrency companies. This may be especially important for stablecoins or cryptos that peg their value to the US dollar.

He said, "With the Republicans controlling Congress, we have reason to expect that stablecoin legislation can advance quite quickly." He also added that the Treasury Secretary is likely to be a key figure in negotiations between the government and Congress on this issue.

O'Neill stated that a legitimate, regulated stablecoin issuance framework could accelerate institutional adoption of cryptos.

The new Treasury Secretary will also play a central role in the Trump administration's efforts to reform Biden's Inflation Reduction Act, which provides generous tax credits for companies and consumers producing and purchasing clean energy products, including a $7,500 tax credit that buyers can apply for at the point of sale for new electric vehicles. This could become a focus for the new administration.

Becent once said that the act needs to be closely examined. He wrote in the Wall Street Journal: "The USA must reform the Inflation Reduction Act's distorting incentives, which encourage non-productive investments that must be sustained through lifetime subsidies."

The Internal Revenue Service (IRS) is one of the most important implementers of these plans, as it establishes the eligibility rules for obtaining these credits, and under Trump's leadership, the IRS will become a target of intense lobbying from the energy industry and other stakeholders.

Despite the Inflation Reduction Act passing without Republican votes, analysts do not believe the entire bill will be repealed.

BTIG analyst Isaac Boltansky wrote in a recent client report: "Efforts to repeal the tax credits in the Inflation Reduction Act will face opposition from many fronts, including constituencies that support cecep solar energy, wind energy, nuclear energy, hydrogen, hydropower, alternative fuels, and energy storage. This plan benefits many corners of the market, which means there will be a diverse array of supporters actively lobbying to maintain it."

Editor/Rocky