Cowen says ‘base case’ is House impeaches Trump, but Senate clears — ‘Bill Clinton 2.0’

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U.S. President Donald Trump walks toward journalists as he departs the White House for a campaign rally in Pennsylvania May 20, 2019 in Washington, DC.

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One of Wall Street’s top brokerages on Tuesday announced that its base case for President Donald Trump is impeachment.

Cowen Washington policy strategist Chris Krueger advised clients a formal accusation by the House of Representatives now seems fated and sets the stage for what he called “Bill Clinton 2.0.”

Our base case is that “the House impeaches Trump, though the Senate does not convict,” Krueger wrote. “Pelosi may also create a new Committee to study the Ukraine/Biden/Whistleblower issue.”

“But whatever the path chosen, an impeachment vote now appears to be a question of when, not if — and more than likely by the end of this week.”

House Speaker Nancy Pelosi is expected to announce a formal impeachment inquiry into President Donald Trump on Tuesday, two sources familiar with the situation tell CNBC. Earlier Tuesday, Pelosi said that Democrats are “ready,” when asked whether she and her caucus will take steps toward Trump’s impeachment.

“That’s why I’ve said as soon as we have the facts, we’re ready. Now we have the facts, we’re ready … for later today,” Pelosi said at The Atlantic Festival in response to a question about impeachment. 

Her latest gestures toward a formal accusation came as the number of congressional Democrats now open to some type of action on the impeachment of Trump climbed above 160, representing well over half the House caucus.

The record support for an official accusation comes after Trump on Tuesday confirmed he withheld aid to Ukraine over frustrations with European allies.

That confirmation at the United Nations in New York followed multiple reports that Trump asked staff to withhold about $400 million in aid more than a week before a July phone call in which the president pressed his Ukranian counterpart to investigate the son of Democrat presidential hopeful Joe Biden.

Trump denies that he pressured Ukrainian President Volodymyr Zelensky in their call July to investigate the Bidens.

But his personal lawyer, Rudy Giuliani, said Monday he can’t be “100%” certain that Donald Trump did not threaten to withhold foreign aid when Trump reportedly urged Ukraine’s president to investigate the son of 2020 Democratic frontrunner Joe Biden.

The scandal “has upended Washington,” Cowen’s Krueger added. “The immediate focus for markets should be on what this means for trade and legislation for the remainder of the year.”

A formal impeachment by the House could, at the very least, undermine Trump’s aggressive trade positioning around the world. Many market economists believe that trade discussions between the U.S. and China have stalled in recent months as the 2020 election approaches, perhaps hopeful that a new president would be more willing to settle.

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