Scott Bessent, a former Soros Fund Management investing chief, said he’s betting on a “Trump Rally” as long as investors believe the ex-president can win the general election.

The S&P 500 hit an all-time high last month, a rally that Bessent attributed to Donald Trump’s commanding lead over President Joe Biden in a number of national polls at the time. Some polls closer to the end of January show the two candidates neck-and-neck in a general election.

“Markets are now anchoring on the potential market-friendly policies of a Trump victory on Nov. 5,” Bessent wrote yesterday to investors in his Key Square Capital Management macro fund.

While Republican presidential contender Nikki Haley has the backing of multiple billionaires, Trump is almost certain to cinch the nomination and face Biden in a general election. Investors anticipating a Trump victory also expect “an extended market-friendly economic, tax and regulatory environment,” Bessent wrote.

The market is especially attuned to whether Trump-era tax cuts set to expire next year will be extended or even made permanent, he said. “The Biden White House economic team has already thrown cold water on a renewal of most Trump-era tax cuts and called for higher taxes on corporates and upper-income Americans,” Bessent wrote.

Trump’s success in the polls is also influencing policymakers, according to Bessent. The Biden administration is inclined to “keep the economy buoyant, provide ample liquidity, contain interest rates” and avoid blowups such as the collapse of Silicon Valley Bank last year, he wrote.

Bessent also pointed to Federal Reserve Chair Jay Powell’s “dovish pivot” in December when he signaled rate cuts were ahead rather than more hikes.

“While we don’t think the Fed is an explicitly political institution, we think nearly all of Washington, DC is united in wanting to prevent the return of Donald Trump,” he wrote.

The investor pushed back against the notion that another Trump administration would sow chaos, and that the former president would use his second term to seek revenge.

If re-elected, it’s likely that Trump “would seek rejuvenation/redemption,” Bessent wrote.

The former president would use his second term to stoke an economic boom similar to the “roaring twenties” of a century ago, according to Bessent. Trump would push for de-regulation and energy independence and would aim to revive domestic manufacturing and extend tax cuts, the investor said.

Despite Trump’s assertions that he plans to impose 10% tariffs on all imported goods, Bessent contends across-the-board duties would be unlikely. Instead, he said, Trump would pursue a weak dollar to make US manufacturing more competitive.

“We are expecting an upward trajectory in the US equity markets,” Bessent wrote. “Barring Biden pulling ahead in substantial fashion, all pullbacks should be bought.”

This article was provided by Bloomberg News.