Wall Street investors’ optimism that the GOP tax reform bill will be passed by year’s end has pushed the markets to record heights.
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The Dow Jones Industrial Average soared past the 24,000-point mark on Thursday, climbing to a new record high as the tax bill continued to move forward.
In an interview on FOX Business’ “Wall Street Week,” UBS Chairman Dr. Axel Weber told Maria Bartiromo the U.S. economy is coming out of crisis mode and is doing the best it ever has over the last 10 years, which is generating more optimism for investors.
“Governments that come in recently are not any more impressed by the crisis. They're looking forward to change their economies. We've seen that here in the U.S., we're seeing it in some of the European environments, where for example in France with Macron there's a forward-looking move rather than looking back at the crisis and seeing how far away we are from the crisis,” Weber said.
Weber said the rebound of energy and energy investments has been the key driver of the economy’s improvement and boosted consumer confidence.
“Roughly 70% of the rebound of growth around the globe is due to the energy normalizing. Almost the entire pick-up of inflation is due to energy prices normalizing again, and actually even trade, 70% of the trade in particular, from emerging markets that are energy exporters, is due to an energy rebound,” he said.
The Republican tax reform bill, which could hit the floor for a final vote today, would lower the corporate tax rate from 35% to 20% and double the standard deduction for individuals and families.
Weber said reducing the corporate tax rate will allow the U.S. to compete with European economies fueling global investments and adding future growth.
“Now with 20% coming up most likely, that's going to change. It's going to be as low as in your most competitive European economies. And so [corporations] will be quite keen to show profits at headquarter rather than at some subsidiary where they are working and producing,” he said.