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Mnuchin said at an event sponsored by news website Axios that
optimism about U.S. growth from policies such as regulatory
reform and tax reform is "definitely not all baked in" to market
valuations.
U.S. stock prices and the dollar have strengthened significantly
since Trump was elected in November, largely in anticipation of
corporate profits rising as regulatory burdens ease and tax
rates fall. Some of those gains were retraced this week as
Republicans in Congress faced stiff opposition from
conservatives in passing a bill to replace the Obamacare health
law.
"I think there is some good news that's baked in, but yet, I
think there is further room for significant growth in the
economy that would be reflected in the markets," Mnuchin said.
"The consequence would be that the market could go up
significantly," Mnuchin added.
Treasury secretaries in the past have shied away from publicly
discussing market valuations.
But Mnuchin said Trump's policies could produce growth of 3
percent to 3.5 percent, which is significantly higher than the
fourth quarter reading of 1.9 percent.
"We're in an environment where the U.S. assets are the most
attractive assets to invest in on a global basis."
Mnuchin said he is still aiming to achieve passage of
comprehensive tax reform by the time Congress takes its August
recess. He also said he expects the Trump administration's
Obamacare replacement bill to pass later on Friday.
(Reporting by David Lawder; Editing by Jeffrey Benkoe and Chizu
Nomiyama)
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