by Greg Valliere, AGF Management Ltd.
PRESIDENT TRUMP CONCEDED THE ELECTION late last night, as the drumbeat intensified for his removal from office. With only 12 days left in his presidency, there probably isn’t enough time for impeachment or invoking the 25th amendment — but it’s a close call.
THE HOUSE COULD QUICKLY VOTE TO IMPEACH, but the prevalent mood in the Senate — where a 2/3rds vote would be required to convict — is that it’s best to move on. That’s our view as well, but if Trump issues mass pardons — to him, his family, to Rudy Giuliani, etc. — then the Senate could vote to convict.
WE CONTINUE TO BELIEVE that the temperature will begin to drop as Joe Biden’s Jan. 20 inauguration approaches, but the post-mortems from this horrific week will persist — focusing on the Capitol police, the punks who have blood on their hands, and of course focusing on Trump.
BUT THERE ARE TWO OTHER IMPORTANT ISSUES that will be dominant this winter:
1. As the nation gasped at the Capitol riot, Covid-19 worsened — cases, hospitalizations and fatalities hit new records. The post-Christmas surge is roaring, which will keep the economy soft. Statistically, first quarter GDP growth looks good, but the labor market has not fully recovered.
2. Joe Biden’s agenda is coming into focus. With Democrats now in control of the Senate, they can use the budget reconciliation process, which requires just 50 votes to pass legislation, not 60 as under ordinary filibuster rules. Another stimulus bill thus is virtually certain, with $2,000 checks and other aid that will raise the bill’s price tag to $1 trillion — at a minimum.
The big impact of the Georgia results, in our opinion, is the Democrats’ control of tax policy. Another reconciliation bill later this year will raise taxes on wealthy individuals, corporations, capital gains, estates, etc.
The Biden agenda — taxes, spending, new regulations — will become a major issue for investors. We look forward to covering the policy changes that are coming; we don’t look forward to an impeachment debate that would further divide the wounded nation and make Trump a martyr, which he most certainly is not.
The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
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This post was first published at the AGF Perspectives Blog.