Thursday, December 14, 2017

© Reuters. President Trump is flanked by staff and cabinet members as he speaks about the Charlotte violence in New York© Reuters. President Trump is flanked by staff and cabinet members as he speaks about the Charlotte violence in New York

By Steve Holland

WASHINGTON (Reuters) – White House Economic Adviser Gary Cohn is remaining in his post, a White House official said on Thursday, after speculation earlier in the day of Cohn’s possible departure rattled the U.S. stock market and the dollar.

“Gary intends to remain in his position as NEC (National Economic Council) director at the White House. Nothing’s changed,” a White House official said.

Wall Street investors were also concerned that U.S. President Donald Trump’s refusal to back down from his initial reaction to the demonstrations in Charlottesville, Virginia, would damage the prospects for his economic agenda, including tax reform.

Key U.S. equity indexes were down between 0.6 percent and 1 percent, while the dollar was a touch higher but well off the day’s peaks before the Cohn speculation.

“Gary is focused on his responsibilities,” the White House official said, declining to comment on whether the president and Cohn had spoken about Cohn’s reaction to what happened this week.

Cohn’s decision to remain comes amid mounting speculation that some top officials may be looking for an exit strategy in the wake of growing backlash to Trump’s response to Saturday’s violence in Charlottesville.

Trump said on Tuesday the anti-racist demonstrators were as responsible for the violence as the neo-Nazis and white supremacists who instigated the protests. Those remarks sparked rebukes from fellow Republicans, top corporate executives and some close allies even as some supporters, including the vice president, stood by the president.

The fallout also led to the disbanding of two CEO advisory panels as a growing number of chief executives from some of the nation’s largest companies resigned this week in protest of the president’s response.

Other corporate executives not on the presidential councils also issued strong statements denouncing racism and bigotry.

Cohn, who left his top job at Goldman Sachs Group Inc (N:GS) to take on the White House position, has served as the administration’s point man on tax reform, infrastructure and other priorities. His departure would be seen as a setback to those plans.

Trump’s increasingly combative relationship with Congress, exacerbated by his latest tweets targeting senators in his own party, could further restrain any progress on those reforms even as Republicans control the White House, Senate and House of Representatives.

One Wall Street executive, who asked not to be named, noted that Cohn serves as “a moderating influence,” in a White House often seen as divided among various camps.

Steve Bannon, a White House senior adviser with close ties to far-right groups, said in an interview published Wednesday that he constantly butts heads with Cohn over issues such as trade with China.

“That’s a fight I fight every day here,” Bannon told the American Prospect, a liberal-leaning political magazine.

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