Scott Bessent Calls Out Congressional Trading Amid Record-Bullish US Equity Bets

Treasury Secretary Scott Bessent has renewed his call to end congressional stock trading, highlighting outsized returns by lawmakers that far outpace market benchmarks.

In 2024, Senate Finance Committee Chair Ron Wyden’s portfolio surged 123.8%, compared with the S&P 500’s 24.9%, while Speaker Nancy Pelosi’s portfolio returned 70.9%.

Bessent Urges End to Congressional Trading as House Leaders See Outsized Returns

Scott Bessent’s warning comes as asset managers take record-long positions in US equities. S&P 500 futures net long exposure has reached 49%, near historic highs.

Analysts say the intersection of extreme market positioning and growing political scrutiny raises questions about timing.

According to EndGame Macro, a renowned analyst, regulatory attention to insider or political trading typically appears late in bull cycles, often when public frustration and valuations peak.

“When the rules tighten for the people closest to the information, it’s often because the upside has already been largely harvested,” the analyst said.

A growing body of research highlights the magnitude of congressional outperformance. A National Bureau of Economic Research working paper by Shang-Jin Wei and Yifan Zhou found that congressional leaders outperform peers by roughly 47% annually after assuming leadership positions.

The analysis identifies two drivers:

• Direct political influence

Such as trading before regulatory actions or investing in firms expected to gain government contracts, and

• Access to nonpublic information

About home-state or donor companies, information that is unavailable to the average investor.

Historical examples illustrate this advantage.

• Pelosi reportedly achieved cumulative returns of 854% after the 2012 STOCK Act, compared with 263% for the S&P 500.
• Wyden, as Senate Finance Committee chair in 2024, allegedly gained 123.8%, while his 2023 performance was 78.5%, well above the S&P 500’s 24.8%.

These figures exceed many professional hedge fund returns, highlighting significant information asymmetries and raising concerns over market fairness.

Bessent’s intervention frames the debate as a credibility issue for Congress rather than a partisan matter.

“When members of Congressional leadership post returns that far exceed many of the world’s top performing hedge funds, it undermines the fundamental credibility of Congress itself,” he said in the post.

Public support for banning congressional trading is strong, with a 2024 YouGov poll showing 77% of Republicans, 73% of Democrats, and 71% of independents in favor.

Legislative efforts, such as the Restore Trust in Congress Act, would require lawmakers and their close relatives to divest individual stocks within 180 days. However, it would allow them to retain mutual funds and ETFs.

Yet, House leaders have not scheduled a floor vote, and only 23 of the required 218 signatures for a discharge petition had been gathered by December 2024.

Opinions remain divided among lawmakers, with some warning that restrictions could deter qualified candidates, while others call reform “common sense” and a matter of good governance.

Record-Bullish Market Positioning Signals Maturing Cycle

The debate on congressional trading comes against a backdrop of historic bullishness in equities. The Kobeissi Letter reports that net long positions in S&P 500 futures increased by 49%, representing a rise of roughly 400% since 2022.

This is nearly double the long-term average and more than two standard deviations above historical norms.

Nasdaq 100 futures are similarly elevated, and the S&P 500 reached 37 all-time highs in 2025, the third-most since 2020.

Despite this, Bank of America (BofA) issues a cautious outlook. The bank forecasts the S&P 500 to reach 7,100 by the end of 2026, only 4% above current levels. BofA cites AI-related valuation pressures and potential tech-driven consumption slowdowns.

Analysts suggest that the combination of extreme positioning and potential regulatory action signals market maturity rather than a new expansion. The timing of reforms potentially highlights when insiders have already captured a significant portion of the upside.

This convergence of record bullish bets and growing regulatory scrutiny serves as a barometer of market cycles, rather than an immediate warning of a crash. It is also a reminder that late-cycle dynamics are shaping both equity and risk asset markets, including crypto.

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