By David Lawder
WASHINGTON (Reuters) - President-elect Donald Trump's pick for Treasury secretary, hedge fund manager Scott Bessent, vowed to maintain the dollar's status as the world's reserve currency as he prepared to face questions from U.S. senators on Thursday on how he will implement Trump's tax cut, tariff and deregulation plans.
Bessent's testimony at a Senate Finance Committee confirmation hearing at 10:30 a.m. EST (1530 GMT) will have financial markets on edge amid worries - reflected in rising bond yields - that Trump's policy plans could stoke inflation and spark a new global trade war that threatens financial stability.
The 62-year-old founder of Key Square Capital Management will need to present himself as a moderating influence on Trump's "more extreme" plans, said David Wessel, director of the Brookings Institution's Hutchins Center on Fiscal and Monetary Policy.
"What the markets and the business community want is to know that there's a grown-up at the table who doesn't think that cutting taxes excessively and running up the debt is a good idea," Wessel said. "And someone who doesn't think that all of Trump's tariff campaign promises are good ideas."
In prepared remarks released on Wednesday night, Bessent laid out a vision for "a new economic golden age" that included prioritizing strategic investments that grow the U.S. economy and making permanent Trump's 2017 individual and small business tax cuts that are due to expire on Dec. 31, 2025.
"We must secure supply chains that are vulnerable to strategic competitors, and we must carefully deploy sanctions as part of a whole-of-government approach to address our national security requirements," Bessent also said in the remarks.
"And critically, we must ensure that the U.S. dollar remains the world's reserve currency."
TARIFF ADVOCATE
Bessent did not mention China in his prepared remarks, but he has been a strong advocate for Trump's plans for sweeping tariffs that range between 10% on all imports and 60% on Chinese goods.
In a Fox News opinion piece published a week before he emerged as the winner of a high-drama contest for Trump's Treasury choice in November, Bessent lauded tariffs as "a means to finally stand up for Americans" after decades of job losses to rising imports.
"Used strategically, tariffs can increase revenue to the Treasury, encourage businesses to restore production and reduce our reliance on industrial production from strategic rivals," especially China, Bessent wrote.