Can an Old Soros Theory Help Bessent Steer Markets?
Can the Treasury secretary talk his way to lower bond yields and a better economy?
A matter of confidence.
Photographer: Chip Somodevilla/Getty Images North AmericaUS Treasury Secretary Scott Bessent spent years working for George Soros, and it appears the legendary investor’s theory about reflexivity left a major impression on the future member of the Trump administration.
Soros has posited that market perceptions and realities exist in a self-reinforcing feedback loop: beliefs about fundamentals shape markets, and markets shape financial and economic realities. Since taking the helm of Trump’s economic team, Bessent has tried mightily to influence market perceptions to get the cycle moving in a favorable direction. But each element of his bullish story is offset, at least to some degree, by the administration's own counterproductive actions.