A comment from U.S. House of Representatives Speaker Paul Ryan may have helped to trigger one of the biggest reversals in stocks in more than a year, a down move that could continue Thursday.
A big reason behind the push for post-U.S. presidential election stock gains in recent months has been the reflation theory, that U.S. President Donald Trump would move forward with his ambitious plans to boost the economy, including with tax reform. However, his inability to get a Republican-led health-care bill pushed through has given some investors pause.
Senior White House advisers have been struggling for a consensus about the shape of the tax plan or the strategy, The Wall Street Journal reported Wednesday, citing several senior administration officials. One official said the current goal for a plan by August may turn out to be ambitious.
Enter Ryan—who has been blamed in some corners of Washington for failing to round up the votes needed to get the GOP health-care plan passed—with some more bad news for stock bulls. He told an audience in Washington, D.C., on Wednesday that tax reform could take longer than repealing and replacing Obamacare would, according to Reuters:
‘The House has a (tax reform) plan but the Senate doesn’t quite have one yet. They’re working on one. The White House hasn’t nailed it down.’