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Joe Biden may be thinking that he doesn’t need the distraction of impeachment: Strategist

Greg Valliere, AGF Investments Chief U.S. Policy Strategist joins the Yahoo Finance Live panel to discuss the arguments against impeachment of Pres. Trump following the violence at the Capitol.

Video Transcript

ZACK GUZMAN: President-elect Joe Biden has been relatively, I guess, more cautious on the push here for impeachment, leaving most of that to the decisions in Congress. And that could be a benefit to the market overall, ratcheting down tensions to focus in on some of the changes he has to push through Congress once he takes office here. To chat that with us is our next guest. Greg Valliere is AGF Investments Chief US Policy Strategist.

And, Greg, I mean, that seems to be what he's trying to do here, maybe let Congress do their job, while he focuses on the policy goals that he's going to have to push through coming into office. So talk to me about why that might be a positive for the nation if we can get past this next week of volatility.

GREG VALLIERE: Yeah, I just can't see impeachment or conviction coming next week. And, you know, I think Joe Biden, deep down in-- he might not say this in public. But I think, deep down in, he's thinking, do I really need this kind of distraction?

He has to get his entire cabinet confirmed. He wants to move quickly on a stimulus bill. We've got COVID. He has regulations he may want to undo. So I think that an impeachment fight would be a huge distraction for Biden, and I think he'd probably be pleased if it went away.

EMILY MCCORMICK: Hi, Greg. This is Emily. I was wondering if there is, potentially, a case to be made to go forward with the impeachment proceedings and, potentially, get Republican Party members on the record about a vote on impeachment in terms of their thinking about the Trump presidency, whether they think he should be held accountable through impeachment. And would that, potentially, have consequences longer term for those lawmakers that are eventually up again for re-election?

GREG VALLIERE: Yeah, there's a lot of moving parts right now, Emily. There's talk of maybe a censure. There's talk of maybe working on impeachment in the late afternoon and the evenings in the end of January and into February to have a two-track system. There are all sorts of scenarios.

But I think that, as Rick said a few minutes ago, I mean, getting those 17 votes, I mean, it's not impossible, but I kind of doubt it. I also would add this. I think the antipathy toward Ted Cruz and Josh Hawley will persist. And I think there are a lot of members in Congress, not all Democrats, who want to have some kind of censure against those two senators.

ZACK GUZMAN: And, Greg, I mean, just turning back to the markets here, we've continue to see the yield on the 10-year climb to levels that we hadn't seen since back in March. And, on that front, I wonder how much of that might have an impact on equities if it is to maybe signal a shift away or a risk premium, as we're seeing play out there now. So what do you make of that?

GREG VALLIERE: You make a really good point, Zack. That's been one of the big stories to see yields go higher. We've got a deficit that's off the charts. We've got an economy that could start to really heat up by the end of the spring.

So I think all eyes will be on the size of the Biden stimulus plan. I think it could exceed $1 trillion. We'll get the $2,000 checks, aid to state and local governments, aid to small businesses.

It's going to be a big, expensive bill. We've got a Fed that will stay exceptionally accommodative. So I wouldn't at all be surprised, by May, April, maybe June, to see the economy really starting to do well.

That has two big implications. One is yields could go even higher. Two is, if the economy is really looking good, then Biden can move on to the next big issue, which is tax increases.

EMILY MCCORMICK: And, Greg, just taking a look at the equity outlook here, we've heard a number of strategists and analysts now calling for a potential correction in the 5%, 10% range happening in the next couple of months, just given these stretch valuations that we're seeing. Is that something that you've penciled into your own outlook?

GREG VALLIERE: No, not necessarily. I think that the fundamentals still look really quite remarkably good. So you've got the big three-- accommodative Fed, more stimulus from Congress, and gradual progress on getting vaccines in people's arms. Those are three very positive fundamentals.

ZACK GUZMAN: All right, there's the latest there. Greg Valliere, AGF Investments Chief US Policy Strategist, I appreciate you coming on here to chat all that with us. Be well.