While President Donald Trump's firing of FBI Director James Comey isn’t seen hurting financial markets, the continuous controversy and political fallout from the move could stunt the White House’s pro-growth economic agenda, analysts warned CNBC.
"I think it's still another story that's going to slow down Trump's agenda," said Greg Valliere, Horizon Investments chief global strategist.
"We're going to have a budget fight in the next few months. Nobody has any idea what the Senate is going to do on health care. You have another huge story that's going to gobble up more time. It's a distraction for sure," he told CNBC.
BMO Private Bank CIO Jack Ablin said while markets shouldn’t be swayed by the Comey news, the firing could increase doubt that already exists about when Congress and the White House will actually tackle tax reform, the policy most important to investors, CNBC.com explained.
"There's a healthy degree of skepticism among investors already that a lot of these policies that Trump has been bombastically touting around aren't going to get signed into law. This would seem to undermine that confidence," said Ablin.
Valliere said he still expects to see tax reform, but timing is uncertain.
"There's only two things I see that could really derail this market. One could be a geopolitical crisis, and I don't see it, and the second would be a sign that tax reform bill is dead, and I don't see it. It's a distraction," Valliere said.
Valliere said he does not expect Comey's termination to lead to the FBI ending its investigation into possible ties between the Trump campaign and Russia.
"It's going to embolden Trump's critics, who say he has something to hide…but I think this has become too much about Comey for the last few months. I think an FBI director should be more circumspect and he wasn't," said Valliere.
"I think there's going to be a huge focus on him [Sessions] and his role. This complicates things. I think the average Americas are sick of this whole thing but inside the beltway, it slows down progress on the Trump agenda," said Valliere.
The direction and strength of the nation's growth under Trump is of much concern and speculation.
The U.S. economy won't achieve the Trump administration's 3 percent growth goal this year and not until all of its tax, regulatory, trade and energy policies are fully in place, Commerce Secretary Wilbur Ross said on Tuesday.
The GDP target "is certainly not achievable this year," Ross told Reuters in an interview.
"The Congress has been slow-walking everything. We don't even have half the people in place."
But Ross said it ultimately could be achieved in the year after all of Trump's business-friendly policies are implemented. He noted that delays were possible if the push for tax cuts was slowed down in Congress.
Meanwhile, some of the most respected economic gurus of modern times agree with Ross and urge patience with Trump.
Veteran financial guru and former Ronald Reagan adviser Larry Kudlow is urging any impatient investors to just give Trump a chance to fully enact his strategies to reform healthcare, spark economic growth and redesign the tax system.
After all, Trump has been in office a relatively short time and has inherited a mountain of problems from the past two decades. “He's trying to fix a lot of problems that have gone unfixed in the last 20 years,” Kudlow explained to CNBC.
Trump “still wants tax reform and healthcare reform. Those are big issues for him.” the Newsmax Finance Insider said.
Many other respected economic voices are predicting robust growth and additional stock-market gains amid Trump's blueprint to truly "Make America Great Again."
David Horowitz, author of the best-selling book "Big Agenda: President Trump's Plan to Save America," told Newsmax TV that the market rally since Trump won the election has more room for gains as the president pushes his pro-business agenda.
“There's more upside. Starting from when he was president-elect he started this stock market boom,” he told Newsmax TV's “The Income Generation Show.”
“There will be corrections. There are going to be setbacks along the way like the healthcare which they hurried too fast. If you're looking over the long term of this administration I think the stock market is going to love Trump,” Horowitz said.
(Newsmax wires services contributed to this report).
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