The United States reportedly has soared to the top of the list of major markets facing the biggest political risk because President Donald Trump's firing of FBI Director James Comey increases the chances that his tax and fiscal policies are delayed.
Investors are also worried that tax reform won’t be approved by mid-term elections, and the GOP could lose its majority in the 2018 vote.
"There are political risks in this country because of uncertainty," Paul Christopher, head global market strategist at Wells Fargo Investment Institute, told CNBC. He said the last time he felt U.S. political risk this much was in 2008 when Washington was attempting to resolve the financial crisis.
"What about political uncertainty in this country? If Trump and Congress don't deliver tax reform or healthcare by the mid-term election, is the Republican majority in the House or Senate at risk? I would say possibly. It's not like leaving the euro zone but there's certainly more risk that would impact the economy going forward," said Christopher.
Christopher said investors are increasingly concerned about the timing of tax reform, and that it could be kicked into next year. "The closer we get to the [2018 mid-term] election, the more likely you get nothing done," he said.
He said if there's a lack of action, his other worry—concern China's economy could be slowing—becomes more worrisome, CNBC reported. "The prospect you're not going to get reflation in the U.S. and China might slow further, that's something where people would have to evaluate the magnitudes," he said.
"Maybe, it's just that we can't get used to the fact that someone's president whose going to act in ways we're not comfortable with, and is not easy to predict. Even if you like Trump, sometimes his tweets get you off guard. Maybe if you like Trump, you're surprised by his slapping of a 20 percent tariff on Canadian lumber," said Christopher.
But other economic experts are much more optimistic.
Professional investor and media analyst Jon Najarian told Newsmax TV that the stock bull market that has been raging since Donald Trump’s election has enough energy to surge as much as 10 percent more despite some looming “bumps” on the road to more record highs.
“The Trump bump can still run,” Najarian told Sunday’s “The Income Generation Show.”
However, there are other trouble spots that remain.
Finance chiefs from many of the world's leading rich nations pressed the United States on Friday not to break a decades-long global consensus in areas such as trade and financial regulation criticized by Trump.
Inequality, international tax rules and cyber security headed the official agenda for Group of Seven finance ministers and central bankers who kicked off a two-day meeting in the southern Italian port city of Bari, Reuters reported.
But Trump's threats to end a multilateral approach to policies from trade to climate change dominated discussions inside the walls of a 12th century Norman castle.
"We need a strong United States to lead the global economy and global politics in a sustainable way," said German Finance Minister Wolfgang Schaeuble when asked his message for U.S. Treasury Secretary Steven Mnuchin.
(Newsmax wire services contributed to this report).
Related Stories:
© 2025 Newsmax Finance. All rights reserved.