US: It’s tax season - Nomura

Analysts at Nomura expect a lot of noise over the next several months in the US until a clear picture emerges with respect to the tax reform.

Key Quotes

“The US Congress is about to seriously embark on tax reform, a tall order given that the last real tax reform in the US was in 1986, 31 years ago.”  

“Markets are focused on this issue as tax reform has implications for the fiscal outlook, the economic outlook, and Federal Reserve policy.” 

“The volume of media and market coverage surrounding tax reform is likely to surge over the next several months, but a clear resolution on what would ultimately pass will unlikely emerge until early next year. Further confusing matters over the next several months is that the information flow surrounding the process of tax reform is very likely to be as large, if not larger, than information on the parameters of tax reform. For example, for process, there will be considerable debate surrounding how tax reform is scored, budget windows, and budget reconciliation.”