Finance Minister Scott Bessent reiterated his stance on calling for an end to stock trading by members of Congress, emphasizing the unusually high returns of politicians that greatly exceed the market benchmark.
In 2024, the private fund of Senate Finance Committee Chairman Ron Wyden rose by 123.8% compared to the S&P 500, which increased by 24.9%, while Speaker Nancy Pelosi's portfolio also yielded a return of 70.9%
Bessent calls for an end to trading in Congress as U.S. House leaders see returns exceeding expectations
Scott Bessent's warning comes as asset managers hold U.S. stocks for the longest period on record, with Long S&P 500 Futures holdings reaching 49%, near an all-time high
Analysts say that the extreme positioning in the market, combined with increased political scrutiny, raises questions about timing
EndGame Macro, a prominent analyst, notes that regulatory interest in insider trading or political trading often arises in the late stages of a market upcycle, especially when public dissatisfaction with market values peaks
When regulations tighten for those close to information, it is often because the opportunities for significant profits have largely been harvested, analysts say
Increasing research underscores the scale of the advantage that politicians in the U.S. Congress enjoy, with the National Bureau of Economic Research publishing research by Shang-Jin Wei and Yifan Zhou showing that congressional leaders achieve returns above their peers of about 47% per year after assuming leadership positions
The analysis identifies two driving factors, namely
direct political influence
such as trading stocks before the government issues new measures or investing in companies expected to receive contracts from the state, and
access to non-public information
such as information about companies in their home state or companies that offer financial support, which ordinary investors have no access to
Historical examples demonstrate such advantages
Pelosi reportedly achieved a cumulative return of 854% following the STOCK Act of 2012, while the S&P 500 returned 263%
Wyden, as the chairman of the Senate Finance Committee in 2024, achieved a return of 123.8%, while in 2023, he returned 78.5%, significantly higher than the S&P 500’s 24.8%
These figures exceed the returns of many professional hedge funds, highlighting information asymmetry and reflecting concerns about market fairness
Bessent's intervention turned the debate into a matter of the credibility of the U.S. Congress rather than partisan politics
When congressional leaders report returns higher than many of the world’s leading hedge funds, it impacts the fundamental credibility of Congress itself, he posted this message
The public's push to ban trading securities in the U.S. Congress is strong, with a 2024 YouGov poll showing that 77% of Republicans, 73% of Democrats, and 71% of independents agree
Legal efforts like the Restore Trust in Congress Act would require legislators and close relatives to sell individual stocks within 180 days, but they can still hold mutual funds and ETFs
However, the Speaker of the House has yet to set a date for the vote, and there are fewer than 23 signatures supporting the petition out of the 218 needed by December 2024
Opinions among lawmakers remain divided, with some warning that restrictive measures may deter qualified candidates, while others call the reforms common sense and a matter of good governance
The peak bullish sentiment indicates that the cycle is becoming ripe
The debate over trading in the U.S. Congress occurs amid positive sentiment in historically high stocks. The Kobeissi Letter reports that net Long positions in S&P 500 futures have increased by 49% or about 400% since 2022
which is nearly double the long-term average and also exceeds historical benchmarks by twofold
Nasdaq 100 futures are also at elevated levels, and the S&P 500 reached an all-time high 37 times in 2025, the third-highest since 2020
Even so, Bank of America (BofA) maintains a cautious outlook, predicting the S&P 500 will reach 7,100 by the end of 2026, a mere 4% increase from current levels, citing valuation pressures related to AI and risks of a slowdown in technology spending
Analysts point out that the extreme positioning along with the possibility of government intervention indicates market maturity rather than a new expansion phase, while the timing of proposed reforms may suggest insiders have already harvested the majority of the benefits
The convergence of record Long positions with increased scrutiny from the government serves as a barometer indicating market cycles rather than a warning of an impending crisis, also cautioning that late-cycle mechanisms are affecting the stock market and risky asset markets including crypto