More Questions, Less Answers

Tuesday wasn’t what I would call a particularly “upbeat” session. More questions were raised than answered both on the political front and in markets.

Jeff Sessions’ testimony before the House Judiciary Committee did not go swimmingly which isn’t particularly surprising. It is now abundantly clear that the Attorney General knowingly misled lawmakers in previous testimony on the Trump campaign’s ties to Moscow although really, it’s probably not accurate to say he “misled” lawmakers because that implies anyone believed him the first place. Additionally, Sessions claimed that his Justice Department has not been improperly influenced by Trump, a laughable proposition, especially in light of recent tweets from the President who has all but demanded that Sessions open an investigation into Hillary Clinton. That all came just hours after The Atlantic revealed that Donald Trump Jr. had an ongoing (if largely one-sided) dialogue with WikiLeaks both during and after the campaign via Twitter DMs.

On the tax front, there were more headlines on state and local property tax deductions, the fate of the Obamacare individual mandate, and on and on. Chuck Schumer is irritated. “The Republicans’ tax plan isn’t ready because President Trump keeps tweeting about changes, such as repealing the individual mandate, and Republicans are fearful of the president’s ludicrous ideas,” the Senate Democratic leader said in opening floor comments, adding that “the president doesn’t know what’s in the bill, he just tweets about it.” So that’s amusing.

But Goldman is still hopeful. “The tax reform debate is moving forward faster than we or most other observers expected [and] while there are a number of issues that could still slow it down, or stop it altogether, we believe the odds that tax reform will be enacted by early 2018—already our base case—have risen to 80% (from 65% previously),” the bank writes, in a note out this morning. So the market has that going for it.

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