James Trescothick

With more than 20 years of experience in financial service industry, James is our Senior Global Strategist and the co-producer and presenter of easyMarkets educational videos. When he is not working on educational programs or preparing webinars, you can find him with the easyMarkets team giving seminars around the world.

Storm clouds are gathering over the Trump administration amid accusations that the president tried to sidestep an investigation concerning his former national security advisor. This has many people asking, will Donald Trump be impeached?

Trump fires Comey

A political crisis swept Washington earlier this month after a memo from then-FBI Director James Comey surfaced. In that memo, Comey alleges that Trump attempted to end an investigation over Michael Flynn’s involvement with Russian officials. Under U.S. law, this is considered obstruction of justice, which is an impeachable offense.[1]

Flynn resigned back in February on information that he failed to inform Vice President Michael Pence over his communication with Russian officials.

Trump fired Comey earlier this month over his mishandling of the Hillary Clinton email scandal. By doing so, he became only the second president in U.S. history to axe his FBI director.

Trump and Russia

Although the Trump administration has denied any wrongdoing in connection with Russia, the president did admit to sharing counterterrorism intelligence with Moscow.

The president’s alleged connection with Russia has undermined his credibility at home. Analysts say this could jeopardize his ability to push through promised reforms ranging from tax cuts to deregulation.

Trump and politics

The White House unveiled its Budget on 23 May, but experts say it is unlikely to survive its first encounter with Republican officials. For starters, the budget assumes sustained economic growth of 3%, something that even the most ardent Trump supporters struggle to justify.[2] On the campaign trail, Trump promised growth of as much as 4%.

The political chaos surrounding the Trump administration certainly wasn’t lost on the financial markets. U.S. stocks sold off in epic fashion on 17 May, right around the time the Comey’s revelation hit the newswire. The large-cap S&P 500 Index plunged 1.8%, its biggest one-day drop in eight months. The Dow Jones Industrial Average also fell nearly 400 points.

A barometer of investor fear known as the CBOE VIX rose a staggering 46%in one day, as risk-averse traders exited equities.[3]

Although stocks have since recovered, significant uncertainty remains.

Trump was happy to leave the political chaos behind this week as he embarked on his first foreign trip aboard Air Force One. Trump visited Saudi Arabia over the weekend before moving on to Israel and the Vatican.

 

[1] Sam Bourgi (22 May 2017). “S&P 500 Futures Rise Following U.S.-Saudi Arms Deal.” Economic Calendar.

[2] Matthew J. Belvedere (25 May 2017). “US economy can do the 3% growth assumed in Trump’s budget, Mohamed El-Erian says.” CNBC.

[3] Sam Bourgi (17 May 2017). “S&P 500 Futures Drop by Most in Eight Months as Volatility Returns.” Economic Calendar.

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