by Greg Valliere, AGF Management Ltd.
JUST A QUESTION OF WHEN: The acquittal of Donald J. Trump, which has been likely for months, could come as early as today or as late as Monday. In the final analysis, this was a political exercise; the evidence mattered little.
REGULAR READERS KNOW that we didnât spend much time on the trial, because it had no impact on the markets, zero. External shocks like a Chinese virus or a tariff war can affect the markets, but the outcome of this trial was never in doubt.
THE POST-MORTEM WILL BE PREDICTABLE: Democrats will howl that the trial was a sham; Republicans will call it a waste of time, a political hit job. Everything now is aimed at influencing opinion ahead of the November election.
THUS TRUMPâS REACTION TO ACQUITTAL WILL BE SIGNIFICANT: If he gloats and continues to threaten Democrats like Adam Schiff, it will delight his base but alienate moderates. A post-acquittal pledge to get back to work on issues like infrastructure, health care, immigration, etc. would be more effective politically.
BUT AS WEâLL SEE NEXT TUESDAY NIGHT, none of the items in Trumpâs State of the Union address will have any likelihood of enactment. His next big push will be for a huge new tax cut, which has no chance in the sullen House.
AS USUAL, TUESDAY NIGHT and beyond will be all about Trump. Many hate him, many love him, but thereâs agreement on one theme â Washington is broken. Heâs the president, presiding over a dysfunctional city that doesnât address peopleâs needs â which is why Trumpâs re-election is far from certain.
BECAUSE HEâS SO INCREDIBLY TALENTED at demonizing his opponents, Trump is the favorite to win re-election. The economy, which may slide below 2% growth this quarter, may not help Trump as much as he hopes, so get ready for more Fed bashing.
FOR NOW, WEâLL SIMPLY CELEBRATE the end of this pathetic trial and this long miserable month of January, which also ends today. Was this farce a victory for Donald Trump? A Pyrrhic victory, one suspects.
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This post was first published at the AGF Perspectives Blog.
