Thursday 06 September 2018 2:43 pm

Impeach Trump? It wouldn’t affect the US economy one jot, says Barclays

Impeaching President Donald Trump would have little to no effect on the fortunes of the US economy, according to Barclays.

Trump said the economy would crash in the event of his impeachment, leaving everybody “very poor”, in an interview with Fox News last month.

In reality, whether Trump sees out his four-year term in the White House or not would make very little difference to the economic health of the US, said William Hobbs, head of investment strategy at Barclays' investment solutions arm.

“We doubt that capital markets would collapse if President Trump’s administration was endangered either electorally or indeed legally,” he said.

“The forward momentum of the world economy, and therefore its capital markets, has little to do with the actions of the White House, past, present or future in our opinion."

He pointed to the attempted impeachments of former presidents Nixon and Clinton as evidence, saying Nixon’s resignation came against a pre-existing backdrop of economic “chaos”.

At the time of Clinton’s Senate acquittal in 1999, meanwhile, the economy was coming towards the end of the dot-com bubble, “a dangerously expensive fantasy that relegated tangible profits below website page views”.

“The real lesson from these two episodes is likely that it was not the impeachment proceedings that drove markets, but as usual, the wider economic context,” Hobbs said.

“The lesson from all this is that the wider economic context matters most for capital markets. Most shares dance to a global rhythm, with the US economy tending to play the lead.”

Barclays doesn’t attribute presidents’ actions to US economic health, but rather the wider economic factors at play during their time at the helm.

Under Trump, US unemployment has fallen to its lowest level in 18 years, and while economic growth has improved, it is below its 2014 peak during the Obama administration.