Watch tax reform, market, economy

The stock market is not the economy. The economy is not the stock market.

These statements may be self-evident, but too often the financial industrial complex conflates the two. While the stock market and the American economy are interwoven with each other, they are not clones, especially as it relates to the tax reform legislation moving on Capitol Hill.

Tax reform legislation is likely to come back before the House and Senate in the week ahead. The two chambers have been ironing out differences in the details of their respective bills in hopes of delivering a final version to President Donald Trump before Congress begins its holiday break.

Don’t let anyone tell you with certainty how these changes will affect the economy.

How will rich Americans use their tax savings? Will a cap on mortgage interest deduction hold back home values, the biggest asset for most Americans? What does the tax bill do for worker productivity? How will it influence production and consumption behavior?

It will take years to see evidence of the answers to these economic questions. As outgoing Federal Reserve Chairman Janet Yellen said at her last news conference last week, “The magnitude and timing of the macroeconomic effects of any tax package remain uncertain.”