Weathering The Storm

Three ways the special investigation into Trump’s presidential campaign could impact the economy.

The naming of a special counsel to investigate possible ties between President Trump’s campaign and Russian officials seems to have calmed the markets for today at least. Former FBI director Robert Mueller is respected by all sides and has promiseda swift investigation. But the markets will be on edge until that investigation is completed.

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No one knows where this runaway train is going, but here are some ways it could play out and how it could impact the economy and rates:

1. A quick clearing of the Trump Administration of any wrongdoing and Congress and the White House get back to work on what matters. Read more.

2. There is no quick resolution and more revelations surface, but Trump hangs on. Stocks suffer, business confidence declines, the economy sputters, and yields stay low. Read more.

3. Trump is either impeached or resigns when he sees the writing on the wall. Stocks initially drop and yields fall, but there is a quick reversal. Read more.

The best thing about this terrible situation is the economy is on sound footing. If the economy was weak, we should be worried this could be a tipping point, but the underlying strength still present in the economy should be enough to weather the storm.

Dwight Johnston is the chief economist of the California and Nevada Credit Union Leagues and president of Dwight Johnston Economics. He is the author of a popular commentary site and is a frequent speaker at credit union board planning sessions and industry conferences.

May 18, 2017

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