The Tension and Turnover at Bessent’s Treasury Department

[MUSIC PLAYING] Pressure is mounting at Scott Besson's Treasury Department. Secretary Besson has a massive remit that I don't think any modern day Treasury Secretary has ever had. Plus, the Trump administration is launching an investigation into Wells Fargo over the bank's efforts to increase home ownership among black Americans. And why more Americans are deciding to move to Israel? It's Wednesday, October 7. I'm Pierre Bienemais for the Wall Street Journal, filling in for Alex Osula. This is the PM edition of What's News, the top headlines and business stories that move the world today. [MUSIC PLAYING] The Wall Street Journal is exclusively reporting that the Trump administration is opening an investigation into Wells Fargo. The officials are looking at whether the bank violated fair lending laws by favoring black or other minority homeowners. Wells Fargo's campaign to help black homeowners goes back years. In 2017, the bank said it was committing $60 billion in loans to help add at least 250,000 black homeowners by 2027. The bank didn't have an immediate comment. This year's Nobel Prize in Chemistry has gone to France's Henri Cagan and Japan's Kenzo Sui for breakthroughs that have helped advance the development of modern pharmaceuticals. The pair's research relates to a concept called homo chirality, which is the tendency of living systems to use just one of two possible mirror image forms of a molecule, kind of like a left hand and a right hand. It's important for the synthesis of small molecules in drugs. The measles outbreak in Pennsylvania is now the biggest outbreak in the US since 1991. The Pennsylvania Department of Health has reported more than 1,000 confirmed cases of measles since an outbreak began in April. State health officials say five people have died. While vaccination efforts led to the US eliminating measles more than 25 years ago, declining vaccination rates have made parts of the country vulnerable to the disease. And the US is now in the verge of losing that elimination status after years of outbreaks. In markets, treasury yields hit their latest multi-decade highs before retreating in the afternoon. After a strong government auction of the 10-year soothed some investor fears, the 10-year yield finished the day at almost 5.28%. Wall Street Journal markets reporter Jack Pitcher says that the bond market turbulence is showing up in the stock market, but it's not showing up in the same way for all companies. If you can get more yieldback on your money for buying government bonds, which are seen as virtually risk-free, it creates a higher hurdle for big investors to want to pay for stocks. Pay up for that extra risk. So we've seen that come in and impact stock multiples. The price that investors are willing to pay for each dollar of earnings that big US companies generate, those are lower across the board, whether that's AI stocks, whether that's other parts of the economy. The difference here is that these AI companies, what we think of as the hyperscalers, Microsoft, Google, Amazon, their earnings are huge. The projections for those keep growing as rates have increased. We can't really say the same for other parts of the stock market, which have been more sensitive to interest rates and have dropped quite a bit, even though you see records up at the index level. All three major stock indexes were treated today, after both the NASDAQ and the S&P hit new records yesterday. The Dow led the losses and closed down 0.7%. Coming up, President Trump has given Treasury Secretary Scott Besant a long to-do list. We look at the Wall Street Journal's report on how Besans handling the pressure after the break. (upbeat music) Treasury Secretary Scott Besant has a lot on his plate, and our reporting has found that the pressure is getting to him. His boss, President Trump, expects him to solve stubborn problems in the economy, including rising barbing costs and high gas prices. He's a lead voice on AI and trade talks with China, and if all that wasn't enough, Besant has also been tasked with ending the war in Iran with a sweeping sanctions plan. Now he faces skepticism from investors, and an economy that could wreck the Republican Party's chances in the midterm elections next month. Brian Schwartz is a White House economic policy reporter at the Wall Street Journal, and he joins me now. Brian Besant has been given a lot for any one person to do as I listed there, and Treasury Secretaries aren't typically expected to end wars. I feel like we have a Secretary of Defense for that. We have a Secretary of State for that, so what gives? Well, Secretary Besant has a massive remit that I don't think any modern day Treasury Secretary has ever had. The reason the President has put all of this on Secretary Besant is because he likes him. When the President has an affection toward you as a member of the administration, you are going to get tasked with a lot of things. The same thing goes to Secretary of State, Marco Rubio, who famously has all these memes online of wearing all these hats. That's very similar to what Secretary Besant is going through right now. And as you're reporting, he's taking it out on his staff. Two major themes here in this reporting, based on interviews with more than 30 current and former officials at the Department and administration-wide and close associates with the Secretary from Wall Street and beyond. There are instances where he has gone what I would define as on offense against various people who work and report directly to him and getting into what our sources tell us are yelling matches with administration officials. And that's one bucket, the other bucket beyond the Treasury Department or things like battles with Elon Musk. Elon Musk at the time working in the administration to lead the Department of Government Efficiency. So there is a track record here with the Secretary going up against people. He feels or kind of, I guess, betraying the President or not doing enough to help the President. And that is similar to what we've heard have taken place within the Treasury Department itself. John Hurley was the Undersecretary of Terrorism and Finance. There was an incident in January where the Secretary just started yelling at him because he didn't think Hurley was actually moving ahead with what the President wanted, which was a Minnesota fraud probe. He thought he wasn't pitching an idea that was enough to please the President regarding that larger probe in a Minnesota fraud and run the Somali communities. And there have been various other incidents like that at the Treasury Department while the Secretary has been under pressure by the President to do all these other things. Hurley has since left his role. And he also told the Journal that he was aligned with Besson on the Minnesota fraud probe. And Besson himself, meanwhile, he's projected some confidence. He dismissed his Wall Street critics as Bloomberg Terminal Bros. And he said this at a fireside chat with a business school. Whenever people say, "Oh, well, Treasury Secretary is taking a risk." Well, it's my dream. I have asymmetric information. I am the house now. So when we intervene with the Japanese yen, I have pretty good insight into what the Japanese, what the Bank of Japan is going to do, what Japanese policy makers are going to do. And you bet against me if you want. So how is critics supposed to be that? I think his critics are going to see that as the Secretary believing he's the be-all-end-all with this insight into the markets. To be fair to him, he's trying to walk that back. The Secretary has said things like, "You know, I just want people to remain calm and not jump to conclusions and not sell off." So I think his critics would say, "Well, how much insight information do you really have, and how is that really working from a policy perspective at this point?" And we can add that a spokesman in the Department of Treasury said that best-ent quote approaches the job with a deep sense of responsibility and urgency, and adding, quote, "has high expectations of the United States' Treasury's performance." Now, question for you, Brian. What does this all mean for the Trump administration's ability to make progress on the goals it set out on the economy or elsewhere? Well, I think it reflects that the President has surrounded himself with people that are going to seemingly mirror his own ways of running the federal government and try that type of aggressive behavior to get things done. The Secretary's defenders, including former White House Chief Strategist Steve Benin, admit that he has a temper, he is demanding, but they also say that that is important for the President because the Secretary needs to take point and getting things done at that agency and wrangling his staff to follow the President's agenda. And if, in fact, those people do not want to follow the President's agenda, according to these people we spoke with, they can go and the Secretary's going to make it very clear to them that that is their choice. They follow what the President wants to do or they may leave. That was Wall Street Journal reporter Brian Schwartz. Brian, thank you. Thank you. And an update on the investigation into fly Dubai's flight 1073. The planes co-pilot who allegedly tried to bring the flight down has told investigators that he had looked for airlines and routes that would take him to Israel. That's according to people briefed on the investigation. The pilot, Hamam al-Hamami, a nomani national living in Dubai, has told investigators that he was motivated to commit the attack because of the situation in Gaza. He almost carried out an attack this past summer before holding back because he cared about one of the crew members on the flight. And finally, today is October 7th. And that marks three years since Hamas attacked Israel, killing around 1,200 people and sparking a war in Gotham. Gaza that has reshaped the Middle East. Since then, many Israelis have left the country. An analysis by Tel Aviv University found that more than a quarter million Israeli citizens left Israel between 2023 and 2025. That's the highest three-year immigration total on record. One that some Israeli lawmakers have called a tsunami. But there's also been a flow of immigrants to Israel. Young Americans are moving there. Wall Street Journal reporter Anvi Bhutani reported on this trend and spoke to some of the Americans making al-Yah, the Hebrew term for Jewish immigration to Israel. This year, an agency that helps North Americans move to Israel says it's on track for four thousand North Americans. That would be the highest number since this organization Neffers-Beneffers began tracking this statistics in the early 2000s. It's mostly American Jews, some who are looking to enlist in the Israeli army, others who are moving to go to university, to do volunteering, and to build lives in Israel. I spoke to two dozen Americans who made this move in the last three years. One of the people I spoke to is named Eve Carlin, who made this move last year from L.A. to Tel Aviv. She had already considered moving to Israel and visited before, but October 7th really accelerated that timeline. I kept saying, okay, one day I'll retire in Israel, and then October 7th happened and a feeling of me wanting to be in Israel just actually grew stronger to want to be there. So in June of 2025, I was 38 years old and I got my life and made al-Yah, that's essentially what led me to live in Israel. Eve landed in Israel just a few hours before the 12-day war between Iran and Israel last summer. It was a very traumatic experience. And I asked her whether that was something that has changed her calculus. A year later, she's still pretty steadfast in her commitment to the country. She started to build a community and she knows that it's the right call. That was Wall Street Journal reporter, Anvi Bhutani. And that's what's news for this Wednesday afternoon. Today's show was produced by Anthony Bansi with supervising producer Tali Arbel. I'm Pierre Bienemain for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.