Treasury Secretary Steven Mnuchin said that stocks could reverse a "significant amount" of their recent gains if Congress fails to pass tax reform.

The treasury secretary said, "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 was speaking in a Politico podcast when he made the remarks.

While Mnuchin warned that stocks could suffer without reform, he added that they could "go up higher" should a bill be passed with a reduction in the corporate tax rate. Mnuchin offered an "absolute guarantee" that a tax reform package will be enacted by the end of the year.

Mnuchin also alluded to the sharp rise in equities prices following President Donald Trump's election in November. The S&P 500 has gained over 20% since the election Nov. 8, 2016, and President Trump has been quick to take credit for the rally, tweeting extensively about stock gains since he took office.

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