AI Summary
5 min read🎙️ The Voices & The Context
- The Format: This structured host dialogue between fixed income and public policy experts unpacks the 2026 U.S. policy-market outlook, evolving from election-night uncertainty to concrete implementation and future risks in a precise, forward-looking analytical exchange.
- The Format: Host discussion.
- The Key Players:
- Michael Zizis: Global Head of Fixed Income Research and Public Policy Strategy, steering the conversation with historical context on policy variables like tariffs and fiscal shifts.
- Ariana Salvatore: U.S. Public Policy Strategist, bringing client insights and detailed forecasts on trade catalysts, affordability measures, and election impacts, creating a seamless, expert back-and-forth chemistry focused on investor-relevant policy evolutions.
Continue reading the full summary in the app — free to try.
Read Full Summary →Free • No credit card required
What you'll learn
- 1 (00:21) **Client Focus on US Public Policy and Markets into 2026**
- 2 (01:27) **Reduction in Policy Uncertainty Across Key Areas**
- 3 (03:31) **Potential Catalysts for Trade Policy Changes**
- 4 (05:16) **Congressional Legislative Possibilities on Affordability**
- 5 (07:13) **Energy Exploration Legislation and Bipartisan Potential**
- 6 (07:46) **Midterm Elections as Policy Catalyst**
- 7 (09:54) **Executive Branch Policies Less Impacted by Midterms**
+ Full timestamped outline available in the app
Show Notes
Our Public Policy Strategists Michael Zezas and Ariana Salvatore break down key moves from the White House, U.S. Congress and Supreme Court that could influence markets 2026.
Read more insights from Morgan Stanley.
----- Transcript -----
Michael Zezas: Welcome to Thoughts on the Market. I'm Michael Zezas, Global Head of Fixed Income Research and Public Policy Strategy.
Ariana Salvatore: And I'm Ariana Salvatore, U.S. Public Policy Strategist.
Michael Zezas: Today we'll be talking about the outlook for U.S. public policy and its interaction with markets into 2026.
It's Wednesday, December 17th at 10:30am in New York.
So, Ariana, we published our year ahead outlook last month. And since then, you've been out there talking to clients about U.S. public policy, its interaction with markets, and how that plays into 2026. What sorts of topics are on investors' minds around this theme?
Ariana Salvatore: So, the first thing I'd say is clients are definitely interested in our more bullish outlook, in particular for the U.S. equity market. And normally we would start these conversations by talking through the policy variables, right? Immigration, deregulation, fiscal, and trade policy. But I think now we're actually post peak uncertainty for those variables, and we're talking through how the policy choices that have been made interact with the outlook.
So, in particular for the equity market, we do think that some of the upside actually is pretty isolated from the fact that we're post peak uncertainty on tariffs, for example. Consumer discretionary – the double upgrade that our strategists made in the outlook has very little to do with the policy backdrop, and more to do with fundamentals, and things like AI and the dollar tailwind and all of all those factors.
So, I think that that's a key difference. I would say it's more about the implementation of these policy decisions rather than which direction is the policy going to go in.
Michael Zezas: Picking up on that point about policy uncertainty, when we were having this conversation a year ago, right after the election, looking into 2025, the key policy variables that we were going to care about – trade, fiscal policy regulation – there was a really wide range of plausible outcomes there.
With tariffs, for example, you could make a credible argument that they weren't going to increase at all. But you could also make a credible argument that the average effective tariff rate was going to go up to 50 or 60 percent. While the tariff story certainly isn't over going into 2026, it certainly feels like we've landed in a place that's more range bound. It's an average effective tariff rate that's four to five time
More from this podcast
Thoughts on the Market →