The real significance of Afghanistan on markets may be on how it’s shaped Fed succession battle
Trying to connect the events in Afghanistan to world financial markets hasn’t been easy.
The Afghan economy, no matter under the rule of the Taliban or not, is too small to matter globally, and in fact is even more sidelined with the U.S. freezing over $9 billion in Afghanistan central bank assets. There is one view that the episode, reflecting poorly on the U.S. ability to project military might, therefore jeopardizes the reserve status of the U.S. dollar, but inconveniently the U.S. dollar
has since been hitting multi-month highs.
There’s also the view that, because the chaotic scenes have cost President Joe Biden in the polls, it will erode his ability to pass his economic agenda through Congress, though again, there’s no evidence for this so far, and the House is back in session this week to work on…