Bessent Faces Credibility Test in Quest to Tame Markets

When auditioning to be President Trump’s Treasury secretary, Scott Bessent accused Democrats of constructing a centrally planned economy.He argued that their interventions in markets were politically motivated and said the sitting Treasury secretary, Janet L.

Yellen, was purposely changing how government bonds were being sold to stimulate the economy before the 2024 election.“History teaches us that prioritizing free enterprise and limiting government’s role in the economy are key to raising living standards,” Mr.Bessent said at a Manhattan Institute conference.Two years later, as Treasury secretary, Mr.

Bessent is seeking his own interventions into the markets and the economy in ways that conflict with his stated philosophy.Since entering the White House, the second Trump administration has taken equity stakes in more than two dozen companies and subsidized the U.S.

critical minerals industry.A former skeptic of tariffs, Mr.

Bessent last week called the taxes that the government collected from companies for their imports “the people’s money.”But global anxiety about America’s heavy, sustained borrowing and the war in Iran has been impossible to obscure, and Mr.Bessent is starting to see the limits of his powers to bend the global economy to his will.This week, six months into a war with Iran that has exacerbated inflation, the Treasury secretary unveiled a new round of economic warfare that he billed as D-Day and Operation Economic Outcast.

It largely amounted to a warning to other nations that they would face U.S.sanctions if they did not cut ties with Iran.Mr.

Bessent also tried to meddle this month in global financial markets as part of an effort to lower interest rates.He did so by announcing surprising interventions in currency and bond markets and by signaling that the U.S.

government was prepared to take further action.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for y...