Wall Street’s celebration of President-elect Donald Trump’s Treasury pick may be a tad premature. The S & P 500 and the Dow Jones Industrial Average rallied to record highs this week as traders assumed that Trump’s choice for Treasury Secretary, Scott Bessent, will tamp down some of the president-elect’s tariff talk. These tariff threats have stoked fears of inflation and recession should the incoming administration’s policies raise consumer prices and lead to a damaging global trade war . The market’s resurgence following the Bessent announcement makes for calming copy, but is it the correct assessment of what’s to come? It’s true that Wall Street veteran Bessent has been a successful money manager. Many also view him as more temperate and conventional than others who were recently under consideration for the top economic job. However, Bessent suggested that he is comfortable using tariffs as negotiations to ” escalate to de-escalate ” the risks of global trade imbalances. The markets may like that sentiment for the moment, but in an October interview with Bloomberg News, Trump referred to “tariff” as “the most beautiful word in the dictionary.” Indeed, Monday night, President-elect Trump promised punishing tariffs on China, Mexico and Canada. The new levies seem to violate the U.S.-Mexico-Canada Agreement that Trump negotiated during his first term. Bessent may have his hands full when trying to reel in the incoming president from imposing across-the-board tariffs that encompass all goods and services entering the U.S. Three goals Bessent’s seemingly soothing three-pronged approach appears to have some inherent flaws. He’d like to accomplish the following: Growing the economy 3% (which the U.S. has done previously ) Cutting the budget deficit to 3% of gross domestic product (which would be less than half of where it stands now) Pumping 3 million more barrels of oil per day (which is possible, but would likely drive prices below the cost of production) In short, Bessent asserts that the incoming administration will largely do what the current administration has already done. Reining in government spending is the exception, as both Trump and Biden administrations have failed on that front. In addition, domestic oil production hit a record level earlier this year. Markets are treating all this as new news. I don’t fully understand the polite applause for things that have already taken place. As an important aside, reducing the federal budget deficit to 3% of GDP, if attempted quickly, would be highly recessionary. That’s a fact the financial markets appear to be glossing over. A rally that may not be justified Traders also appear to be reasoning that someone with Bessent’s experience, understanding of financial markets and reasonable success as a hedge fund manager will allow him to appeal to the incoming president’s better angels. We’ll see. It should be noted that as the markets rally, traders are also starting to anticipate negotiated ends to wars in Ukraine and the Middle East, also as evidenced by the decline in energy prices of late. All of that is, of course, welcome news. But little of what’s been discussed about the Treasury Secretary pick supports the rather large rallies we’ve seen in both stocks and bond prices. Those other forces – like the prospective reduction in hostilities in the Middle East – may be at play and have simply coincided with Bessent’s ascent. Still, it seems only fair to give Bessent the benefit of the doubt that his skills are superior to those of the other named candidates. But the markets will tell us if he is the best candidate to lead the most important economic position in government – or if an expert in alternative investing is merely better than the all the other alternatives. — CNBC contributor Ron Insana is CEO of iFi.AI, an artificial intelligence fintech firm.