A Conversation with US Secretary of the Treasury Scott Bessent | Global Conference 2025

Milken Institute Global Conference Opening & Key Announcements

• Event Scope: The 28th annual Milken Institute Global Conference convened with 1,000 speakers and 200 sessions under the theme "Toward a Flourishing Future."
• Resource Gaps: Richard D'Atezio highlighted three critical global disparities:
  • 1 in 11 people live on less than $2/day despite $500 trillion in global wealth creation.
  • Tuberculosis caused 1.3 million deaths in the previous year despite being preventable and curable.
  • Nearly 2 billion people lack internet access, blocking entry to basic education, telemedicine, and economic opportunity.
• Societal Focus: The Institute emphasized the need to bridge the gap between available technology and societal will, calling for diversity in perspective to avoid echo chambers.
• Civility Warning: D'Atezio noted a dangerous erosion of civility in media and politics, where anger has replaced listening and hostility has led to violence, negatively impacting youth anxiety and depression.
• Strategic Goal: The conference aims to foster "bold, inclusive coalitions" to ensure technology serves as a lever for expanding access to healthcare, capital, and opportunity globally.

Trump Administration Economic Agenda (Secretary Scott Bessent)

• Core Pillars: The administration's economic strategy integrates trade, tax cuts, and deregulation as interlocking components designed to drive long-term investment.
• Trade Policy: Tariffs are utilized as a mechanism to encourage foreign companies to invest directly in the U.S., hire American workers, and build factories domestically.
• Tax Legislation: A proposed "big beautiful bill" aims to:
  • Make the small business deduction permanent to prevent tax hikes on Main Street.
  • Provide tax credits for research and innovation to stimulate high-tech investment.
  • Restore 100% expensing for equipment and expand it to new factory construction.
• Deregulation & Permitting: Executive orders target reducing federal approval processes for energy and construction projects from years to months to accelerate the "building renaissance."
• Energy Strategy: The administration champions an "all-of-the-above" energy approach to lower business costs and drive economic activity.
• Investment Metrics: In the first 100 days of the term, the administration claims to have secured more investment pledges from companies than the previous four-year administration.
• Business Formation: New business applications reached record highs in March, signaling strong entrepreneurial confidence.
• Market Outlook: Secretary Bessent characterized U.S. markets as "antifragile," stating the economy historically recovers stronger from shocks, and predicted a "new golden age" of prosperity.

Treasury Secretary Scott Bessent Policy Details

• Fiscal Targets: The Treasury aims to reduce the federal deficit by 1% annually, targeting a return to a 3.5% deficit-to-GDP ratio by the end of the term to lower the debt-to-GDP ratio.
• China Strategy: Bessent described potential negotiations with China as a "big, beautiful rebalancing" where increased U.S. manufacturing pairs with increased Chinese consumption, potentially improving trade terms.
• Ukraine Partnership: An historic economic partnership with Ukraine was signed, featuring:
  • A "loan-to-own" equity structure (50-50 split) rather than debt-for-equity swaps.
  • Joint investment of U.S. capital (via DFC) and Ukrainian assets.
  • Strategic intent to signal U.S. commitment to Ukraine and increase leverage in negotiations with Russia.
  • Initial drafting involved a four-page memorandum, which was expanded to a full agreement following a public "blow-up" at the White House.
• Regulatory Appointments: The administration has aligned financial regulators to focus on being "safe, sound, and smart," including new leadership at the Fed, OCC, FDIC, SEC (Paul Atkins), and CFTC (Brian Quinn).
• Private Credit: Treasury identified private credit growth as evidence that regulated banking has been too constrained, signaling a regulatory shift to support this sector.
• Permitting Reform: Pressure is being placed on state and local governments to streamline permitting, citing examples where projects take 7 years in Chicago versus 2.5 years in Texas.

Technology, AI, and Interest Rates

• AI & Quantum Leadership: Bessent stated the U.S. must maintain a lead in AI and quantum computing to prevent losing global dominance, focusing on stopping IP theft and setting environments for entrepreneurs.
• Labor Strategy: Policy aims to ensure high-quality opportunities for workers in traditional industries (e.g., steelworkers) comparable to those in tech sectors like Silicon Valley.
• Interest Rate Strategy: The goal is to return to "non-inflationary growth" by removing U.S. government credit risk, which Bessent argues will naturally lower interest rates.
• Market Volatility: Bessent noted the 10-year Treasury yield has seen variations of over 2% in a single day, a stark contrast to the 2% variation seen over entire decades in the 1950s.
• Reprivatization: The administration plans to shrink the government's share of the economy (currently 25% of the nation's economy within 10 miles of D.C.) and shift excess employment to the private sector through deregulation.

The American Dream Definition

• Core Definition: Secretary Bessent defines the American dream as "equal opportunity for great outcomes" and the belief that the system allows for mobility regardless of background.
• Key Condition: The single most essential condition identified for the American dream is "freedom to live your life," whether as a steelworker, financier, or community volunteer.
• Future Vision: The administration views the upcoming 250th anniversary as an opportunity to build a system where children of construction workers can become financial founders or medical researchers.