Key points of a previously undisclosed personnel appointment: David Zervos will serve as an advisor to Treasury Secretary Scott Bessent. Zervos spent more than 15 years at Jefferies, where he long studied Federal Reserve policy and financial markets. The position does not require Senate confirmation; the Treasury is currently grappling with rising US Treasury yields, artificial intelligence-related capital spending, and various economic policy battles.
US Treasury Secretary Scott Bessent has hired veteran Wall Street economist and longtime Jefferies chief market strategist David Zervos to join the Treasury as an advisor. Zervos will take on a wide-ranging advisory role and is expected to begin work immediately.
Zervos supports Bessent's recent move to expand the size of some long-term Treasury buybacks, while also calling on the Federal Reserve to adjust its balance sheet policy. In a brief interview, Zervos described himself as a "Wall Street geek" and said he was delighted to begin his third stint in government service. Speaking of Bessent, Zervos said: "This administration has gone through many turbulent periods, and Bessent has delivered an extremely outstanding performance in steering the US economy. Whether it is trade issues or the challenges brought by war, he always steps up."
After a series of departures at the Treasury, Zervos's arrival will replenish the department's intellectual firepower. Related reports show that as of mid-August, 7 of the Treasury's 16 Senate-confirmed appointees had left; since becoming Treasury chief in January 2025, Bessent has already replaced three chiefs of staff. Another Wall Street economist, Joseph Lavorgna, previously held the same advisory role under Bessent before departing. The advisor position does not require Senate confirmation.
Bessent's portfolio of responsibilities is unusually broad among Treasury chiefs. He is effectively President Trump's chief negotiator on China affairs and is also deeply involved in artificial intelligence policy discussions; however, Trump said last Friday that Bessent will not also serve as the government's chief AI advisor. Zervos had previously been a potential candidate for Federal Reserve chair, but the president ultimately chose Kevin Warsh for the role in January.
Zervos has worked at New York-based investment bank Jefferies since 2010. He holds a doctorate in economics and has served at the Federal Reserve twice: early in his career, in the early 1990s, he worked on economics and interest rate research; after leaving public service for the private sector, he returned to the Fed after the 2009 financial crisis as a visiting advisor. At that time Warsh was a Fed governor, though it is unclear whether the two had direct working contact then.
In an email to clients, Zervos said he will serve as a special government employee (SGE). That status can exempt him from the onerous divestiture requirements of ordinary federal appointments, but it places limits on the length of service. Zervos expects his term to end in April 2027.
Zervos argued last year that interest rates should fall substantially. After Warsh took over as Federal Reserve chair, Zervos said space for rate cuts could be created by shrinking the Fed's balance sheet, which is precisely Warsh's core policy priority. The Fed raised rates earlier this month, the first increase since 2023. The decision drew dissatisfaction from some economists within the Trump administration, but Bessent was relatively cautious and restrained. He said Sunday on Fox News that the Fed "should keep an open mind" on economic management issues.
Facing persistently rising rates, Bessent has intervened in the Treasury market. Driven by a combination of US economic strength, capital competition from AI construction, and inflation concerns fueled by the Iran war, the 10-year Treasury yield hit a 19-year high last seen in 2007. Last month Zervos publicly backed Bessent's decision to expand long-term Treasury buybacks, a move that partly eased upward pressure on some Treasury yields. Some Wall Street institutions had criticized the Treasury buyback program, but Zervos expressed support for it. Zervos said: "The Treasury holds all the policy ammunition and chips, and in this situation, it is hard to fight against the tide."