President Biden will be hosting the annual NATO (North Atlantic Treaty Organization) summit in Washington, DC this week, which could prove pivotal in proving his competency to world leaders and Democrat lawmakers calling for Biden to exit from the 2024 election.

Jim Townsend, former Deputy Assistant Secretary of Defense for European and NATO policy, explains why this meeting will be a proof of strength for newly elected officials, such as Britain Prime Minister Keir Starmer — who led the Labour Party to a landslide victory — and France's Emmanuel Macron after defending his post in a snap election.

"This is a test on how they present themselves publicly. There won't be decisions made because those, again, have been decided earlier too," Townsend tells Yahoo Finance. "A lot of this is how they get along with their new colleagues. How they present themselves in their country publicly. There's a lot of public events during the 75th anniversary [of NATO], so the impact really won't be felt until a couple of months from now when new issues come up, new decisions have to be made by these new teams, and we'll see how well they do."

Townsend goes on to comment on what a US-NATO relationship could look like under a second Trump presidency and how Trump would approach the Russia-Ukraine War:

"That's what Kyiv is anxious about. Other allies are anxious, too, because they don't want to be left alone dealing with Ukraine. And should Trump make a decision to disengage a bit from NATO, we hope that's not what he does. But this would definitely have an impact, particularly if Trump makes a separate deal with Putin."

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Luke Carberry Mogan.