US President Donald Trump thinks that US markets will plummet if he is impeached. It comes after investors were spooked by the formal impeachment inquiry announced by Speaker of the House of Representatives Nancy Pelosi.
“If they actually did this the markets would crash. Do you think it was luck that got us to the best Stock Market and Economy in our history. It wasn’t!” Trump said in one of his early morning tweets on Thursday. He was replying to a journalist’s post on falling stocks.
On Tuesday evening, Speaker Nancy Pelosi said that the House of Representatives is moving forward with impeachment proceedings against Trump, accusing him of pressuring Ukrainian President Volodymyr Zelensky to investigate 2020 candidate Joe Biden’s son for corruption. The inquiry still requires a House vote before it is authorized.
The announcement drove down the stock market, with the Dow Jones Industrial Average losing more than 142 points or around 0.5 percent, while the S&P 500 and the Nasdaq Composite dropped 0.8 percent and 1.46 percent respectively.
Despite Trump’s claim that the stock market would not flourish without him, analysts say impeachment may actually trigger a rally, as happened during the Clinton era. Back in 1999, President Bill Clinton was impeached by the House of Representatives, but the Senate did not support the move.
“The 10-year Treasury yield rose about 50bps (basis points) in less than two months from the date Mr Clinton was impeached to the day the Senate acquitted him. A 50bps move seems too aggressive in the 2019 world of low yields, but we think a 20-25bps move could happen,” said Michael Schumacher, rates strategy director at Wells Fargo. “We guesstimate the ‘impeachment effect’ is good for another 5-10bps rally in 10s could happen.”
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