In a move that will surprise precisely no one who has followed his post-presidential career, Donald Trump abruptly terminated an interview with NBC News yesterday after a heated exchange over his claims regarding the integrity of the 2020 election. The former president, who has made baseless assertions of widespread fraud a cornerstone of his political platform, reportedly stormed out of the studio when pressed for evidence by journalist Kristen Welker.
This is, of course, the latest instalment in a long-running saga where a man who built a brand on television now finds the medium increasingly inhospitable. The financial markets, ever alert to political instability, barely flickered. Gilt yields held steady, and the pound remained mercifully flat. The market, as it often does, is pricing in the probability that this is noise, not signal.
But let us be clear about the economic consequences of such behaviour. The United States, as the world's largest economy and issuer of the global reserve currency, relies on a bedrock of institutional credibility. When a former president actively undermines that credibility without a shred of empirical evidence, he is, in effect, shorting the very system that underpins American prosperity. Capital flight, while not yet evident, is a risk that cannot be dismissed. Investors detest uncertainty. And Trump, with his penchant for disrupting norms, is a walking, talking volatility index.
Welker, to her credit, did not flinch. She asked the obvious question: where is the proof? Trump, lacking the data to support his case, did what he has always done: he retreated. This is not a negotiation; it is a walkout. And in the world of finance, a walkout is a failure to reach a settlement. It is the equivalent of a default. Sovereign debt markets punish such behaviour with higher yields. The individual, in this case, may be untroubled, but the nation pays the premium.
The incident will, of course, be dissected by pundits and political strategists. But for those of us who watch the bottom line, the takeaway is simpler: the premium on American political risk just ticked up a few basis points. Whether the market prices that in permanently remains to be seen. But one thing is certain: credibility, once lost, is expensive to reclaim. And in the high-stakes game of global finance, there is no such thing as a free lunch, nor a free lie.
