00:00 Speaker A
Is a third term for President Trump possible and what would it mean for markets? Still with me are Yahoo Finance's Ali Canal and Inez Ferre. I posed this very question to Carlyle's David Rubenstein. He broke down how a third Trump term could happen. Take a listen.
00:18 David Rubenstein
In my view it could. Um, ah, under the 22nd Amendment, which was passed in 19, ratified in 1951, it was designed to by Republicans to keep people from like FDR from ever doing what he did. FDR did four terms and Republicans were not happy about that. So finally in 1951, they ratified the amendment that they wanted, which says, no one can be elected and serve as President more than two terms. However, there's a flaw in the way it's written. If you were elected Vice President and you, the president, resigns the next minute after he's sworn in, or she's sworn in, and you succeed him, that is, I think, legal under the 22nd Amendment, not precluded. They could have drafted it much better. So I, it's possible.
01:53 Speaker A
All right, who wants this hot potato jump ball? I'm just gonna, Inez, I'm gonna go to you. I think you, you look ready. Not that you're not, Ali, Inez wants to weigh in on this.
02:06 Inez Ferre
Look, I think if there were to be a third term, I think that the markets actually wouldn't care as much as if the Fed chair were to be pushed out early. That is because between Dems and Republicans, look, the markets just care about whether companies can increase their bottom line, and they have been able to under both Democrats or Republicans. So my take is that if there were to be a third one, you wouldn't see that much of a reaction. Just take a look at other countries. Venezuela has had a leader in there for a long time and their markets nominally are at all-time highs. But I do think that again with the Fed chair, that's a different story.
03:24 Speaker A
Well said, Inez. Ali, I'll toss this hot potato over to you. This, if it were to happen, and David writes more about this in his newsletter, no idea how he even finds time to do some of these things. Um, but it would be a real expansion of the power of the executive branch to say the very least.
03:49 Ali Canal
Yeah, and I would be very curious to see how markets would react here, particularly the bond market, which we know has been a big checkpoint in general, especially for this administration. You can even look back at the April tariff announcements. We saw a huge surge in that 10 year. President Trump admitted he was watching it and backed off. Now look, for something like this, Trump has floated the idea, then he said he wouldn't be considering it. We have a top DOJ official not completely ruling it out. And look, with this administration, you have to take him at his word, but I think to a certain extent, I don't foresee this happening. But Inez brings up a good point that I do think the removal of a Fed chair, the firing of a Fed chair, interfering with Fed independence, that is the biggest risk to the market right now. We saw that in just a sheer reaction in stocks, bonds, and the US dollar yesterday.
04:53 Speaker A
Also well said. And I should mention too, he would still have to run again.
