Scott Bessent has finally been confirmed as Treasury Secretary and already has developed a plan to execute the president elect economic agenda. Bessent’s “three arrows” plan (3-3-3), similar to the one Sinzo Abe implemented in Japan, include cutting the budget deficit to 3% of GDP by 2028, spurring GDP growth of 3% through deregulation, and producing an additional 3 million barrels of oil a day. He also committed to extending Trump tax cuts and eliminate taxes on tips and social security benefits. Bessent is advocating for a “global reordering” of some sorts, stating that he wants to take an active role in its development. He’s confronted, however, with the worst budget deficit of major economies (see below), and he needs to finance it, overcoming the debt ceiling and a potential government shutdown, while convincing global investors that Treasuries continue to be the best place to hold cash. It appears to be an ambitious plan with important challenges ahead, and a very impatient boss.
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