‘Crazy political instability’ will prevail for a while, policy strategist says

AGF Investments Chief US Policy Strategist Greg Valliere joins Yahoo Finance Live to discuss the potential arrest of Donald Trump, how a Trump indictment would affect U.S. elections and markets, and the outlook for the Republican Party.

Video transcript

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- Former President Donald Trump wrote on Truth Social Saturday that he expects an indictment on Tuesday and called for protests. Trump noting that the use of a testimony from one of his fixers, Michael Cohen, does not hold the credibility needed to prosecute in the Stormy Daniels case. With nearly a year until the primaries begin, what is this impact expected to have on the US election and markets? For that, let's get to AGF Investments Chief US Policy Strategist Greg Valliere. Greg, what impact is it expected to have from your perspective, if any at all?

GREG VALLIERE: Yeah, you just can't make this stuff up. It's so wild. I honestly feel this is a plus for Donald Trump if he's, in fact, indicted, which I think is likely. I'm not sure it's Tuesday, but I think it's likely. Number one-- it gives him publicity, which he craves. Number two-- it gives him an opportunity to smoke out a lot of Republicans to see where they are. And number three, maybe most importantly-- Donald Trump plays the martyr really, really effectively. And he now gets to play martyr. And I think it will help him politically.

- If he's indicted, what are the rules around whether he can be president?

GREG VALLIERE: Well, it's unprecedented, isn't it? But at the same time, most legal experts would contend that you can indict a sitting president. The Justice Department has always been kind of cagey on that, but I think you can. You could even indict somebody who's incarcerated. It's not totally out of the question. So I think there is precedent.

And Julie, the irony here is that there are better cases. I mean, this case with Stormy Daniels is not an easy one, and it's also going to rely on the testimony of Michael Cohen, who's a felon. More importantly, there are bigger and better cases-- Georgia, the January 6 case. So there are others to come.

- OK. So what is the reality of an actual tailwind from this indictment existing or perhaps bubbling up? Because even if we look back to some of the candidates who he had supported in past races, whether it be the midterms, whether it be the 2020 elections and even runoffs as well, there have been significant losses or a lack of a wave that's been more like a puddle, as some political pundits have called it, in the past two.

GREG VALLIERE: Well, Trump could fizzle. I don't think he's going to fizzle right now. His supporters are more energized than we've seen in many months. But if there's another indictment out of Georgia and then still another one later in the year, Trump could start to lose Republican support because people may conclude he's got simply too much baggage. That's not out of the question. If that starts to happen, DeSantis will get a careful look.

But if it's not DeSantis, you have to ask the question, is there someone out there who could win a general election, who's relatively moderate? I say yes. I say it's Glenn Youngkin of Virginia, the governor of Virginia. Not well known around the country, but he won a stunning upset a couple of years ago against Terry McAuliffe. And most importantly, perhaps, Youngkin is worth $500 million of his own money. He's a former Carlisle executive. So I think that Youngkin-- after all the turmoil we're going to see this year, Youngkin is going to be one to watch.

- Yeah, an actual multimillionaire-- imagine that-- running for office and being able to use his funds. Has this situation actually, in a weird way, done President Biden a favor? Because it's causing-- it's creating a lot of noise. In the meantime, there are some foreign policy headlines that are maybe not so great for the president.

GREG VALLIERE: There are so much competing narratives, so many competing narratives right now. You've got Putin's aide. You've got the banks. You have the possible problems with the debt ceiling and US defaults. And now you've got this crazy political instability that I think will prevail for a while. So you're right. I think for Joe Biden, it's not an easy path, but I think his flaws may become overshadowed by the Trump flaws.

- Is there any economic implication to all of this? And what is perhaps the top one that you would take away?

GREG VALLIERE: I'd say the top one is a sense of uncertainty. I think that the Republicans still haven't gotten their act together. They still have to come up with their own budget. And we've got a huge debt ceiling fight. It might not be in late summer. It could be in early summer. We'll see. There could be a problem with receipts because of all the bank problems. But I'd say it's the debt ceiling. That's the one story that is going to get even more complicated.

- Good to see you, Greg. Thank you so much for your perspective on all of these issues. AGF Investments Chief US Policy Strategist Greg Valliere, appreciate it.