Major Geopolitical Risks Are Right Here at Home

When we consider geopolitical risk, we tend to focus on things that are ‘out there.’ We might think of military tensions between the US and North Korea, or war in the Middle East, or Brexit. But more and more, analysts are looking to the US as a significant source of geopolitical risk.
Markets surged after the election of Donald Trump. Investors optimistic about the prospect of significant economic reforms fueled what has become known as the ‘Trump bump.’ But that optimism has cooled in the wake of the Republican failure to repeal or even reform Obamacare. Now analysts wonder if Trump has the political clout to push his broader economic agenda of tax cuts, infrastructure spending and regulatory reform through. On top of that, there is increasing worry about whether Congress will be able to come up with a plan to increase the debt ceiling in time to avert a government shutdown.
BlackRock portfolio manager Russ Koesterich told the Financial Times of London that all of this has made the US one of the primary sources of geopolitical concern in the world.

This post was published at Schiffgold on AUGUST 28, 2017.