Wyoming Rep. Liz Cheney likely to lose her seat in Tuesday’s primary election

Yahoo Finance’s Rick Newman joins the Live show to discuss the expectations for Tuesday’s Wyoming primary election, the fallout from the FBI raid on former President Trump, and the outlook for midterm elections.

Video Transcript

- Republican lawmaker Liz Cheney is struggling at the polls in Wyoming. Her vote to impeach former President Trump now making her the face of the anti-Trump movement. Not a good look in the cowboy state where Donald Trump remains in vogue. Yahoo Finance senior columnist Rick Newman has the latest. Rick, break this down for us.

RICK NEWMAN: Wyoming is the Trumpiest state in the country. He got the highest vote percentage there in the 2020 election. So Liz Cheney's opposition-- the opposition to Liz Cheney is no surprise. And she is going to lose her re-election bid unless the polls are dramatically wrong. And that's something she had to know. I mean, she had to know that's the way the electorate breaks in Wyoming. And yet she did decide-- she didn't just vote to impeach Trump. She's one of the lead prosecutors, if you will, for the January 6 panel. She's been very prominent in the prime time hearings.

I think it's safe to say she's the most anti-Trump Republican there is right now. So what's her future going to be? I mean, I think that's the question. But it's probably safe to say she's going to continue her crusade against Trump in one form or another.

- Has the FBI raid of Mar-a-Lago changed any of the calculus here?

RICK NEWMAN: Everybody is trying to figure that out. I don't think we know yet. So what we know about that raid is it certainly helped Trump with fundraising. Every time he has some cause to claim the witch hunt is after him again, he's being prosecuted or persecuted by the government, the fundraising emails go flying out. He was using the raid on Mar-a-Lago as a fundraising mechanism about one second after it happened. So it has helped him in that regard.

So here's my best guess about what's going to happen next. Nothing. I don't think anything is going to happen before the midterm elections. And it's possible that nothing else will happen at all because one of the possible things the Justice Department could have been trying to do is simply get those documents back. We know there were now 11 boxes of classified documents, including top secret, the most classified type of document there is.

And the government now has those. So are they going to now prosecute Trump for mishandling documents? Honestly, that seems very unlikely. If the government is going to go after Trump, it really needs to be an ironclad case on something that just about everybody can understand. It needs to be simple and straightforward. And I think mishandling documents is not so straightforward. And it seems like small potatoes to a lot of voters. So I'm not sure much else is going to happen. I think it's going to simmer down by the time of the election. We'll see what effect it has.

- So getting back then to Wyoming for a moment and sort of bringing it also back to the markets and the economy, I mean, is there any read through we should be watching for? The conventional wisdom is obviously that the Republicans are going to take the House, right. But does it matter what kind of Republicans? Because it's not clear that there's going to be a sweep by so-called Trump Republicans even if that person is winning in Wyoming.

RICK NEWMAN: I don't think it does matter. I think Kevin McCarthy, the Republican leader in the House, has indicated that if he becomes the next Speaker, which still seems likely, one thing that's going to happen is they're going to be a lot of hearings into the Biden administration, hearings into Hunter Biden. They're going to call Merrick Garland, the attorney general, up to explain the Trump raid, if you will.

None of that is likely to affect policy. And I think the main difference for markets is if Republicans win the House, they will be able to block Biden's legislative agenda, which means Biden's legislative agenda is basically over. One thing that will be a certainty if Republicans take the House-- no more tax hikes. That's not going to happen. And even if Democrats retain control, which is small likelihood, but perhaps rising a little bit, I think still we might not see any tax hikes.

So that's the I think the main thing. I think it's just binary. I think whether Republicans get the House and can block the Biden agenda is the main thing investors need to be thinking about. And that still seems likely. We're seeing some movement in favor of Democrats. But the math is really stacked against them in terms of retaining the House. So that is still what you would call the base case. Republicans take the House.

- And conventional wisdom is that stalemate is good for markets.

RICK NEWMAN: Sure. As long as it's not COVID again. As long as there's not an emergency.

- That requires things to actually get done.

RICK NEWMAN: So if we're not in a recession and we don't need any new fiscal stimulus-- and Lord knows we've had enough of that in the last few years, probably more than we need-- then yeah. Stalemate will be fine for two years. And probably all the essential bills will get passed. Defense. Authorization. Looks like Republicans have kind of finally figured out that shutting down the government every couple of years is a bad idea. Voters hate that. So yeah. Stalemate could be good for markets.

- We'll see. All right. Thanks, Rick. Appreciate it.