Here’s why markets are so scared of the latest Italian political drama

Political uncertainty in Italy has unhinged world markets, raising the specter of a euro crisis that could ripple across the global economy and even force the Federal Reserve to slow its rate-hiking plans.

Several strategists say there is little chance the euro zone’s third-largest economy will move to leave the single currency, creating a continent-wide crisis of confidence. But internal chaos and a new election could make for a rocky summer for markets and even put a dent in European economic growth.

Italy moved to the foreground as the latest source of angst for markets, after a weekend of drama in which President Sergio Mattarella on Sunday blocked the formation of a government that would have been decidedly against the euro.

Source: CNBC

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