Well, isn’t that a peach? Impeach. That is the word that has been on the lips of those in Washington D.C. and blasted across media outlets. News reports suggesting disclosure of sensitive information by President Trump to Russia had Democrats in a frenzy and media salivating for a scoop. Even Republicans are wishing things would quiet down for a bit. The current surge of emotion is being driven by a news report that the President put pressure on the now fired FBI Director Comey to suppress any further investigation into contact between government officials and Russia. Without actual testimony to that effect from Comey, it would be far too brazen to believe that an impeachment process is probable or would be successful.
Remember, no US President has ever been impeached (Two, Clinton and Jackson, were tried by the House but acquitted by the Senate. One, Nixon, resigned in advance of proceedings.). However, the specter of the issue was enough to cause equity markets to fall meaningfully on the day. The recently calm fear gauge (VIX index) also spiked back to more normal levels. From a purely economic standpoint, the loss of political capital by the Administration further strains the ability to achieve pro-growth policy by distracting from tax reform and deregulation. Equity markets bounced back a bit later in the week, but in this charged environment we have to expect more volatility to come.