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Pro Analysis

Breakingviews: Mnuchin’s stock-market brag is double-edged sword

A pedestrian carries an umbrella while walking along Wall Street past the New York Stock Exchange in New York.
Michael Nagle | Bloomberg | Getty Images
A pedestrian carries an umbrella while walking along Wall Street past the New York Stock Exchange in New York.

Steven Mnuchin's stock-market brag could turn out to be a double-edged sword. The new U.S. Treasury secretary says the post-election rally in the equities market reflects faith in President Donald Trump and his promises for tax reform and fiscal stimulus. Both plans need approval from Congress, and may be accompanied by higher inflation. Anti-immigrant and trade policies could also mute market gains.

Mnuchin told CNBC on Thursday that he hopes to have a tax-reform bill passed by Congress by August. That's an ambitious timetable, even with Republicans controlling Congress and the White House. There are major differences between the House of Representatives and the Senate, which will likely come up with a separate proposal. One senator said current House tax proposals would be lucky to draw 10 votes out of 100. The administration will use its own rosy growth forecasts compared to the Congressional Budget Office estimates on which lawmakers rely.