Bernanke Warns of Impact of Political Risk

May 17, 2017 Share Print 0

All the drama in Washington is even rattling Ben Bernanke.

The man who played a central role in tackling the 2008 financial crisis was asked on Wednesday if he’s worried about the quality or stability of leadership in the White House.

“It’s a reasonable concern, obviously,” Bernanke said at the SALT Conference in Las Vegas.

The former Federal Reserve chairman said it makes sense that Wall Street is responding negatively to the latest cloud of controversy hovering over the White House.

“One of the reasons the markets are reacting is because there’s a lot of uncertainty. Things could break a lot of different ways here,” Bernanke said from the hedge fund conference.

The Dow plunged more than 250 points on Wednesday. The selloff came a day after bombshell news that former FBI director James Comey wrote memos indicating President Trump asked him to end the investigation into former national security adviser Michael Flynn.

The selloff on Wall Street follows a period when investors seemed mostly unfazed by signs that Trump’s stumbles could doom his agenda of tax cuts that investors want.

“Markets are very blasé about political risk, until the very last moment,” Bernanke said.

via CNN

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.