The stock market is "pretty savvy" about discounting the likelihood of major events, such as whether pro-growth policy proposals from President-elect Donald Trump will be implemented, the co-head of investment banking at Goldman Sachs told CNBC on Thursday.
Before Election Day, policy risks out of Washington to the economy were weighted to downside, Goldman's John Waldron said on CNBC's "Squawk on the Street."
But since Trump won, and Republicans also kept both the House and the Senate, he said: "We're seeing more of those 'animal spirits' come back into the marketplace."
Those "animal spirits," or emotional feelings of optimism, have pushed the stock market to record high after record high, with the Dow Jones industrial average about 60 points shy of the 20,000 level around midday Thursday on Wall Street.
"If we get a tax reform deal, almost regardless of how the rates get set one way or another, it's a significant positive," Waldron said. "Broadly from a sentiment standpoint, the tax reform bill looks like it may happen with reasonable certainty."
Addressing the departure of Goldman COO Gary Cohn to be chairman of Trump's National Economic Council, Waldron said: "I expect that most of [Cohn's] focus will be on thinking about policy that can really help growth in the United States, and really driving more job creation and more opportunity for the broader base of the American population."