By Lucinda Shen
October 18, 2017

As U.S. stock markets surged to new highs that even President Donald Trump boasted about Wednesday, Treasury Secretary Steven Mnuchin cautioned investors about a looming danger: Without tax reforms, the stock market could lose much of the trillions of dollars it has gained since last year’s election.

“There is no question that the rally in the stock market has baked into it reasonably high expectations of us getting tax cuts and tax reform done,” Mnuchin said during a Politico Money podcast Wednesday. “To the extent we get the tax deal done, the stock market will go up higher. But there’s no question in my mind that if we don’t get it done, you’re going to see a reversal of a significant amount of these gains.”

Since Trump’s election in November, the S&P 500 has gained more than $3.5 trillion in value, with investors hoping that a Republican Congress would usher in lower taxes and fewer regulations against businesses. By Tuesday’s market close, the value of all companies listed on the S&P 500 equaled about $22.7 trillion.

Some of that increase is related to investors’ expectations for corporate tax cuts, which Mnuchin offered an “absolute guarantee” that Trump would sign into law before this year is out.

But even as both the S&P 500 and Dow Jones industrial average rose to record levels again Wednesday, with the Dow closing above 23000 for the first time, analysts don’t actually have high hopes that tax reform will happen in 2017.

Evercore ISI’s Terry Haines, for example, says he thinks there’s a 55% chance that tax reform will pass before the end of the year, though he’s put higher odds on it happening by spring of next year. Goldman Sachs (gs), meanwhile, maintains that there’s a 65% probability that tax reform passes in 2018, according to CNBC.

While Mnuchin predicts that stock markets will fall should the two sides of Congress fail to agree on a tax reform plan, he also thinks that stocks could lift even higher if a tax deal actually materializes.

Despite stocks’ current heights, there is evidence that Mnuchin could be right on his more optimistic prediction. Goldman Sachs compiled a basket of 50 stocks with the highest tax rates, which in theory have the most to gain from Trump’s proposed 20% corporate tax cuts. Still, that basket has underperformed the wider S&P 500’s 20% jump since Trump’s November election, gaining just 17%. That suggests those stocks still have room to run—that is, if taxes are cut.

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