The Mueller Report: Five Key Themes; Trump’s Fed Nominees: Thrown Under the Bus?
Author: Greg Valliere
April 17, 2019
WASHINGTON ON EDGE: This city’s political discourse for the next few months will be framed by the Mueller report, which is set for release tomorrow morning. With both parties preparing a blizzard of sound bites and tweets, here’s our early take on five key take-aways:
1. Initial outrage over redactions: Safest bet of all — within minutes of the report’s release, there will be cries of “cover up,” because the report will be heavily redacted.
2. New life for obstruction of justice charges: There will be something for everyone in the report but the big focus will be on obstruction of justice. Trump’s boasts notwithstanding, he most definitely has not been “fully exonerated” on that issue.
3. Democrats undaunted: Dozens of hearings and subpoenas and indictments loom on other issues, ranging from payments to a porn star — which seem to be a clear violation of campaign finance laws — to the potentially explosive issue of the president using money from the Trump foundation to pay for personal expenses, which is clearly illegal. But you cannot indict a sitting president, legal experts agree.
4. The key by far — Trump’s reaction: We still see no path toward impeachment, then conviction in the Senate, where there simply aren’t 67 votes to oust the president. Logically, Trump should hunker down for a few days until this new storm blows over, but logic doesn’t apply to him. If Trump reacts furiously to embarrassing new revelations or the prospect of public testimony from Mueller, it could breathe new life into the probes.
5. The market reaction — yawn: The stock market is nearing record highs (as the economy approaches a landmark this summer — the longest expansion in U.S. history). The markets have learned to live with the Washington dysfunction, and there’s no reason to believe the Mueller report will have any real impact on investors.
* * * * *
A CRINGE-INDUCING TRADITION: When it’s clear that a potential nominee won’t win Senate approval, that nominee is left to twist in the wind before a mercy killing.
THIS CERTAINLY APPLIES TO HERMAN CAIN, whose nomination to the Federal Reserve’s Board of Governors is dead; Trump economic adviser Larry Kudlow all but pulled the plug yesterday when he confirmed that the
White House is looking at other candidates. It’s up to Cain to decide whether to pull out, Kudlow cynically proclaimed.
WHAT DOES THIS MEAN FOR STEPHEN MOORE? The supply side apostle still has a chance to prevail with his Fed nomination because he has solid support from Senate Republicans, who are reluctant to kill two Fed nominations. But Moore faces a daunting vetting process that will focus on his child support, alimony and tax issues.
BOTTOM LINE: The hype about the Fed losing its independence is over-blown, since Cain is finished and Moore is in trouble, and the White House has gone back to the drawing board — looking for someone less controversial and more qualified. The Fed, meanwhile, is grappling with options to get inflation re-ignited, which seemingly will give Trump just what he wants — a dovish central bank as the next election approaches.
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.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), Highstreet Asset Management Inc. (Highstreet), AGF Investments America Inc. (AGFA), AGF Asset Management (Asia) Limited (AGF AM Asia) and AGF International Advisors Company Limited (AGFIA). AGFA is a registered advisor in the U.S. AGFI and Highstreet are registered as portfolio managers across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. AGF AM Asia is registered as a portfolio manager in Singapore. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
© 2019 AGF Management Limited. All rights reserved.