Stubborn politicians could have a destructive influence on the U.S. economy later this year, a UBS economist told CNBC this week.
Seth Carpenter, U.S. chief economist at UBS, told CNBC's "Squawk Box Europe" that "toxic" and "intractable" politics were already weighing on markets, and posed a threat to the U.S. economy.
"The biggest concern for all of us is luckily not in the near-term, but to the extent that there's doubling down on the desire for the border wall," he said. "If that continues until late summer, early autumn – where the debt ceiling is really going to be a binding constraint – I think that's where we could start to worry. People become dug in, and if the administration doesn't take responsibility for ensuring that the debt limit gets raised – especially when Republicans control one of the Houses of Congress – then I think we could have markets truly on edge as it comes down to the wire."