Impeaching a US president is always bad news for the markets

It might start formally this month. It might be next month, or not until Christmas, and even if it starts, it might not prove successful. But the Democrats in Washington have now started impeachment proceedings against Donald Trump, and some form of legal action that could ultimately end in the eviction of the president from the White House looks inevitable.

Right now, the markets are taking that in their stride. A few wobbles aside, there has been hardly any reaction. There are so many political problems around the world it may simply be added to the list as one more potential pitfall to be reckoned with.

But hold on. The record shows that impeachment is always terrible for the markets. The last couple of times it happened, the equity indices crashed. True, there were plenty of reasons for those plunges, and turmoil in Washington may only have been the trigger rather than the main cause. But that doesn’t mean action against the president can’t spark a rout the same way it did in 1974 and 1998.

In some ways, it is remarkable that Trump has managed to get through three years in the White House without facing an impeachment action before now.

He has had such a scandal-ridden career, and is surrounded by such chaos and has so little regard for the rules, it always looked inevitable. Impeachment has been under discussion almost since the day of his election. This week, however, it finally turned real.