The stock market selloff “reinforces” the case for the new tax law, House Ways and Means Chairman Kevin Brady said Monday.
“It reinforces that tax reform is growing this economy — because look at the basis of it,” said the Texas Republican, noting that the sell-off began Friday after the jobs report showed wages rising at the fastest clip of the recovery, raising expectations of faster interest rate increases from the Federal Reserve.
The Dow Jones industrial average plunged nearly 5 percent Monday after falling steeply Friday. Many analysts attributed the rout to the perception that the Fed was likely to tighten monetary policy faster in response to the good jobs report.
But Brady, who played an instrumental role in the passage of the tax cuts, argued Monday to reporters at the Capitol that a stronger labor market and more normal monetary policy from the Fed were good things.
“Corrections like this are normal, and certainly in this case because of what underlies them — stronger payrolls, higher paychecks, and the Fed beginning to normalize interest rates — that’s a healthy thing,” he said.
Much of Monday's decline took place as President Trump took the stage in Ohio for a speech on the benefits of the new tax law.
