Under President Donald Trump's current administration, Wall Street is closely monitoring the economic landscape shaped by an aggressive tariff agenda. Despite the uncertainty these policies create, investors have developed a unique strategy: hoping that the president will not follow through on his most severe tariff threats.

There's a popular nickname for how to play Trump trade policy: the "TACO Trade." But investors have mixed opinions about whether it's a safe bet.

Some Wall Street investors are beginning to doubt whether the harshest outcomes of President Trump's tariff threats will materialize. But in the absence of certainty, banks still face real challenges in M&A and long-term strategy.