President Trump has always warned not to take credit for the stock market or you’ll be blamed when it falls. Well, his Treasury Secretary, Mnuchin, has just put the weight of a possible correction on Congress. He says that if Congress does not pass a package of tax cuts this year then they will be responsible for the 20% drop in stocks which will follow. Mnuchin spoke plainly, saying “To the extent we get the tax deal done, the stock market will go up higher … But there is no question in my mind if we don’t get it done you are going to see a reversal of a significant amount of these gains”.
FINSUM: To some extent we think the White House is absolutely right about this. Markets are excited about a new tax package and a lot of pressure is on Congress to get it through.