New Post-Mueller Themes: Trump vs. Russia, Trump vs. Republicans
Author: Greg Valliere
March 28, 2019
SPRING HAS ARRIVED, BASEBALL IS BACK, and suddenly the winter’s two major themes seem to be fading — the Mueller report is out, with only a modest impact; and the interest rate plunge may have run its course, because the U.S. economy is solid and the Fed has no intention of cutting rates any time soon. So it’s on to new themes, and there will be plenty as Donald Trump shifts gears.
TRUMP VS. RUSSIA: The bloom is finally off the rose, as tensions rise between Donald Trump and Vladimir Putin. Trump issued a harsh warning to Russia yesterday — get your troops out of Venezuela, or “all options are on the table.” About 100 special operations troops arrived in Caracas on Saturday from Moscow.
TRUMP VS. REPUBLICANS: We were with investors in the fabulous city of Montreal this week — but we weren’t too far away from Washington to miss the astonishment on Capitol Hill at Trump’s miscalculation on health care. We talked with one Republican staffer yesterday who said Trump blindsided the party with a tone-deaf call to fix health care — an albatross for the GOP, which has no chance of fixing health care. Trump handed the Democrats a rich campaign issue, demoralizing Republicans, who had virtually no time to celebrate the Mueller report.
CHINA DEAL: Since the Fed is months away from any interest rate shift, a big market story this spring will be the ongoing U.S.-China trade negotiations. The talks are not in trouble, but they’re taking much longer than the markets anticipated. Nevertheless, there seems to be further progress. The Reuters web site — always one of our first reads in the morning — is reporting that the Chinese will make “unprecedented” concessions as a high-level U.S. delegation arrives in Beijing today. We still expect a deal by late spring.
STEPHEN MOORE NOMINATION IN TROUBLE? The likelihood that the supply side evangelist will become a Federal Reserve governor suffered a serious blow last night as reports surfaced that he’s in a tax dispute with the IRS over a child support deduction; he has been slapped with a $75,000 lien. It’s possible that this can be resolved, but Moore’s tax troubles — and his extremely erratic forecasting history — have suddenly made his chances of confirmation less than 50-50.
JOE BIDEN NEEDS TO MOVE: A major theme this spring will be whether Joe Biden, moving slowly, could be eclipsed by a pack of younger Democrats running for president. Biden needs to announce soon, before more money and talent goes to his challengers. The age gap is not trivial; Biden, 76, may sound stale compared to the new movers and shakers — headed, amazingly, by the 37-year old mayor of South Bend, Ind., Pete Buttigieg, who’s the most articulate and interesting candidate in the field.
THE TRUMP THEME WILL DOMINATE, AS USUAL: We’ll get our first long look at the post-Mueller Donald Trump tonight at a fundraiser in Michigan. He’ll be in full campaign mode, scathing and outrageous before his adoring base. Trump still dominates this city unlike any president in decades.
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