WSJ's Take On the Week Why This Morgan Stanley Exec Says Tariffs Will Be Struck Down
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Jan 18, 2026 Monica Guerra, Head of U.S. Policy at Morgan Stanley Wealth Management, shares her insights on positioning investors for a midterm election year. She predicts that gridlock in Congress often leads to market gains and boldly forecasts the Supreme Court may strike down Trump's tariffs. Guerra explains that fiscal constraints make $2,000 tariff-funded checks unlikely, while emphasizing burgeoning opportunities in defense and tech sectors. Her analysis highlights how geopolitical risks influence market dynamics and the significance of bipartisan agreements.
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Fed Structural Reform Could Be Coming
- The Fed's future may involve structural changes separating the chair's operational role from FOMC policy voting.
- Monica Guerra says reorging roles could prevent mission creep and reshape monetary governance.
Midterm Years Temper Market Strength
- Midterm years historically show weaker market performance than other years, though not necessarily negative.
- Monica Guerra notes year two of an administration is often when policy momentum slows and markets moderate.
Watch Corporate Tax Incentives Closely
- Watch corporate tax incentives in the One Big Beautiful Bill for long-term growth implications.
- Monica Guerra recommends focusing on bonus depreciation and immediate R&D expensing benefits for firms.