Tax reform is 'very important' for the markets: El-Erian

By Leia Klingel Tax Reform FOXBusiness

Mohamed El-Erian on tax reform's potential impact on economic growth

Allianz Chief Economic Advisor Mohamed El-Erian on tax reform, the Federal Reserve, ECB and the state of the markets.

Markets could continue to experience actual, and future growth, if U.S. lawmakers succeed at passing tax reform as part of an overall package of pro-growth initiatives, according to Mohamed A. El-Erian, chief economic adviser at Allianz.

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El-Erian told FOX Business’ Maria Bartiromo that U.S. tax reform is “very important” for the markets and that it needs to be done as part of a package including deregulation and infrastructure spending. The economist said that “if done in a package [tax reform] will have a very positive impact on growth,” adding that we need “all” of these measures to boost actual and future growth.

Shifting the topic, Bartiromo asked El-Erian his thoughts on what a Federal Reserve led by John Taylor would look like. The question comes as the rumor spreads that Taylor is the front-runner to become the next Fed chair. El-Erian said it would be a Federal Reserve with a “very strong economist at its head,” but more important than who will be the next Fed chair is the U.S.’s growth policies: tax reform, deregulation, and infrastructure spending.

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Meanwhile, EY Global Chairman and CEO Mark Weinberger is also positive about what tax reform could do to the U.S. economy. According to Weinberger, the whole package of tax cuts will focus on middle class tax cuts “no matter what you are hearing or seeing” and that there is a major desire to lower small business tax rates, and corporate rates, to be more competitive on a global scale.

“All of that is good for the economy, jobs, wages,” Weinberger told Bartiromo during an interview on FOX Business.