Economic Policy Uncertainty Likely to Rise

In the wake of the decapitation of the FBI, financial indicators suggest a negative shock. I suspect an increase in uncertainty, given that political turmoil could cloud the path of economic policy implementation (tax reform/cuts, infrastructure, etc.). Here is the S&P 500 futures for June 2017.



Source: Yahoo Finance accessed as of 5:05PM Pacific.

My guess is that daily indicators of economic policy uncertainty will rise tomorrow.

Update, 7:20PM Pacific: Impeachment in 2017 odds rise, as of 7:15PM Pacific.



Source: PredictIt.

Update, 5/10, 11AM Pacific: From WaPo, an assessment:

— Another significant repercussion: Every piece of Trump’s agenda just became harder to get through Congress. Democrats will be less inclined than ever to work with this president, and the liberal base will become even less tolerant of red state incumbents collaborating with him. It’s going to be really hard to get to 60 votes for anything Trump wants for a while. Whoever Trump nominates as Comey’s replacement will face a brutal confirmation hearing before the Senate Judiciary Committee. It will get saturation-level media coverage.

2 thoughts on “Economic Policy Uncertainty Likely to Rise

    1. Menzie Chinn Post author

      Julian Silk: Don’t know about EPU; the index goes back to 1985. Surprisingly, first release on EPU for today was down. First release is usually highly revised. Or maybe political news crowded out economic news.

      Reply

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