As the US macroeconomic story has slowed considerably over the past year, a former White House adviser has warned of “huge risks” to financial stability.
“When you look at the New York case, I really think that the judge's ruling against President Trump was so undemocratic and unconstitutional that it looks like there's a conspiracy to put him in jail and put him in jail. ,” former White House Council of Economic Advisers Chairman Kevin Hassett said on “Morning with Maria” on Tuesday.
“If President Trump were to go to Rikers Island in chains, would he want to buy U.S. Treasuries the next day?” he argued.
U.S. gross domestic product (GDP), the broadest measure of goods and services produced across the economy, rose at an annualized rate of 1.6% in the three months from January to March, the Commerce Department said for the first time. Reported by reading data. this year.
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It was the slowest pace of growth in two years, well below the 2.4% growth forecast by economists at LSEG, and signaled a sharp slowdown from the 3.4% pace in the fourth quarter.
After showing below-average growth momentum, the market reacted and stock investors went into sell mode, with the Dow Jones Industrial Average dropping more than 375 points and the S&P 500 and tech-heavy Nasdaq Composite each dropping 0.5%. The stock closed down 0.6%.
“What really worries me about the short-term risks to the economy is the seriousness with which Democrats are working on this bill,” Hassett said. “Imagine if they were actually successful. I want it. It's like we're bananas.” The Republic collapsed the moment they took him to Rikers, and I can't imagine what will happen to the Treasury market that day. ”
While stocks fell two weeks ago, bonds rose, with the 10-year Treasury yield at 4.076%, its highest level since November.
“The market will be watching, and it will be one of the biggest market impacts we've ever seen,” Hassett said of Trump's potential prison sentence.
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“Yields have risen significantly and stock prices have fallen significantly,” he added. “If you're a Swiss investor and you're thinking, 'Should I buy U.S. bonds?' and you see Trump going to Rikers with these outrageous charges, you're not going to want to buy bonds. ?”
Former President Donald Trump returned to a New York City courtroom this week to defend himself against charges related to alleged hush-money payments. And the judge denied the defense team's request for a mistrial following testimony from adult actress Stormy Daniels on Tuesday.
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FOX Business' Megan Henney and Suzanne O'Halloran contributed to this report.