He oversees the tariff policy that has crashed the stock market.
And he’s put the retirement hopes of millions of British savers on hold as the value of their pension funds has shrunk and the world teeters on the brink of recession.
Scott Bessent is the steward of the world’s biggest economy – and Donald Trump’s tax collector-in-chief.
As US Treasury Secretary, he is responsible for raking in the hundreds of billions of dollars in extra import duties that the White House wants to collect in tariffs. The hope is that this will fund tax cuts and make a dent in the colossal $36trillion (£28trillion) national debt pile.
Bessent, 63, is the equivalent of our Chancellor, Rachel Reeves. Except he is much richer, better qualified and far more experienced in the dark arts of high finance.
Far from Reeves’ background as a relatively lowly toiler at the Bank of England and HBOS, Bessent is a billionaire Wall Street trader.
He made his name and fortune by placing a massive bet against sterling – and winning hands down.
The father-of-two is also a good friend of King Charles and Queen Camilla, with this relationship potentially offering a lifeline for the UK’s economic hopes.
Now he has spoken for the first time in detail about how he broke the pound with his hedge-fund boss, George Soros, the legendary money man now aged 94.
Scott Bessent is the steward of the world’s biggest economy – and Donald Trump’s tax collector-in-chief
He is a close friend of King Charles and Queen Camilla, and a long-time supporter of the King’s charities
The pair won a gamble dubbed ‘the trade of the century’ that cost UK taxpayers over £3billion.
His central role in that dramatic episode provides a fascinating insight into someone who is arguably best placed within the White House to influence his capricious boss and persuade him to sign a trade deal with Britain.
In 1992, Bessent was a young hedge-fund trader running Soros’s London office.
Britain was in recession, house prices were collapsing and, crucially, homeowners were mortgaged to the hilt on floating rate loans that moved up or down with the Bank of England’s base rate.
‘So if the Bank of England raised rates on a Wednesday, your mortgage went up on a Friday,’ said Bessent.
At the time the pound was also pegged to the deutschmark in the Exchange Rate Mechanism, a precursor to the euro.
It meant that if sterling fell for whatever reason, the Bank would have to raise interest rates to support the pound to keep it inside an agreed range with the German currency.
Alternatively, it could buy pounds on the open market to protect its value against the deutschmark.
Bessent spotted a once-in-a-lifetime opportunity.
In what he calls his ‘lightbulb’ moment, he rang Stan Druckenmiller, Soros’s right-hand man in New York, and told him the Bank of England was in a bind.
‘They had to stay within a band,’ Bessent recalled.
‘I thought if they raised rates to try to stay in the band and protect the currency it would be unsustainable because British homeowners would get bankrupted.’
Bessent made his money under the tutelage of hedge fund manager George Soros, now aged 94
Armed with this insight, Druckenmiller came up with what Bessent describes as a ‘great feat of analysis’.
The currency bands set up ‘this incredible asymmetric bet’, said Bessent.
If Soros and his chums kept selling pounds using borrowed money it would cause the Bank to keep raising interest rates to defend the currency.
‘I can push them up against one side of the band and their mandate is just to push me back to the other side,’ Bessent told the All-In in DC podcast.
In other words, if the bet was big enough and repeated often enough it was only a matter of time before the Bank blinked.
The barrage of bets eventually took its toll.
On ‘Black Wednesday’, September 16, 1992, the pound crashed out of the ERM after the Bank failed to stem the tidal wave of selling. This was despite raising interest rates to a ruinous 15pc – a level which would have bankrupted many British home owners.
Soros, Bessent and Druckenmiller netted more than $1billion for the fund – but that wasn’t the end of it.
‘We’d made all that money and (we said), “now what?” because there’s going to be the trade after the trade,’ said Bessent.
So having sold the pound they bought the UK stock market, which soared after sterling’s devaluation made British exports cheaper.
‘I think we made another 20pc during the rest of the year,’ recalled Bessent.
‘This isn’t well publicised,’ he added.
Urbane, articulate and sophisticated, Bessent is the polar opposite of the many yes-men – and a few yes-women – who surround Trump and lap up his every word.
He is Yale-educated and a self-confessed ‘economic historian’.
Many hoped, and perhaps still hope, that the veteran Wall Street trader can act as a brake on Trump’s tariff mayhem – and as a check on his boss’s many other flights of fancy. Among the US President’s closest advisers, he is one of the least gung-ho about tariffs.
But like others inside the Trump tent, notably Tesla tycoon Elon Musk, this billionaire also has the zeal of a convert.
Bessent, who has two children with his lawyer husband John Freeman, donated millions to Trump’s election campaign after deciding to ‘come out from behind my desk’ and go all-in on the Republican candidate.
He had previously been a big backer of the Democrats – just like Soros, his former boss.
A fervent fan of deregulation, Bessent has been surprisingly candid about the impact of sweeping tariffs on the US and world economy.
Donald Trump’s wide-ranging tariffs were announced on April 2, which the US President described as Liberation Day
Camilla during her first solo trip to the US in 1999, during which she stayed at Bessent’s sprawling mansion in New York
The universal 10pc levy – and enhanced rates for those countries deemed to be ‘ripping off’ the US, as Trump puts it – are a ‘one-time price adjustment’, Bessent said last weekend.
Asked by NBC News about remarks he made in January that ‘tariffs are inflationary’, Bessent stressed higher import taxes do not lead to continuous price increases.
‘There’s a big difference between insipid, endemic inflation within the system and consistent price level increases and a one-time adjustment,’ he said.
The distinction may be lost on the millions of Americans who face higher prices for their imported cars, smart phones and sneakers.
Bessent has also been criticised for being out of touch with Trump’s rust-belt voter base after saying he believes ‘access to cheap goods is not the essence of the American dream’.
Instead, he insists ‘the American dream is rooted in the concept that any citizen can achieve prosperity, upward mobility and economic security’.
He was trying to say the chance of a decent local manufacturing job was more important than higher prices at the checkout – but it sounded tin-eared to Americans trying to make ends meet.
Bessent made his fortune off the backs of British taxpayers betting against the pound.
He can be blamed for his part in dashing – or at least delaying – the retirement dreams of hard-working British households.
But, like Trump, he has a soft spot for Britain – and, in particular, for the monarchy.
He is a close friend of King Charles and Queen Camilla, and a long-time supporter of the King’s charities.
Camilla stayed at his sprawling home in the Hamptons, New York, in 1999 during her first solo trip to the US.
A source told The Mail on Sunday last year: ‘Scott has known King Charles for many years. He was a big supporter of the Prince’s Trust when Charles was Prince of Wales.
‘They became extremely close after Princess Diana died and Scott was part of the plan to improve Camilla’s image.
‘She came to the US in 1999 and stayed with him, and he introduced her to everyone who is anyone in New York society.
‘They remain close and Scott often attends private fundraisers at the Palace.’
Such long-standing personal relationships may give Reeves and her boss Sir Keir Starmer some glimmer of hope that Britain can swerve the worst of Trump’s tariffs and secure a better trade deal with the US.
Bessent has said tariffs could be used as a negotiating tool to get better trade deals from other nations without actually imposing them.
He gave the strongest hint yesterday that tariffs are a means to an end rather than end in themselves: ‘Many of our trading partners have queued up. They have kept their cool. They have not escalated and they will get priority in the queue.’
More than 70 countries have approached the White House for tariff talks since Trump’s shock ’Liberation Day’ announcement sent financial markets into a tailspin.
Bessent told reporters yesterday that he expects a couple of big deals ‘very quickly’, in remarks that helped shares recover some of their recent losses.
Britain may not be at the front of that queue for now. But with an unprecedented second state visit by Trump in the offing, which the King will host, it soon will be.
And the UK will be back on top of Bessent’s towering in-tray.
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