Wall Street workers are poised to start popping the champagne at the end of the year.
Bonus checks are expected to soar by up to 30% in some financial sectors — despite earlier warnings that President Donald Trump’s trade war would lead to a decrease by as much as 20% in extra pay, according to the latest report by Johnson Associates on Tuesday.
With the markets chugging along at or near record highs after briefly convulsing following Trump’s “Liberation Day” rollout in April, the compensation consultant now predicts across-the-board increases for most finance workers.
“The year will end up broadly positive, which is a big change from what we were thinking three or four months ago,” said Alan Johnson, who runs Johnson Associates.
“Financial services have fared pretty well, and benefited in some cases from the volatility, and the up markets.”
Leading the charge are equity traders, who could see their bonuses jump by between 20% and 30% because of market volatility, according to the report.
Those who trade bonds and other fixed-income products are in line for padded paychecks of 10% to 20%, while debt underwriters are expected to get a bonus bump of between 5% and 15%.
Workers in other sectors including retail and commercial banking, asset or wealth management, investment banking advisory and hedge funds could get up to a 7.5% increase, Johnson said.
The positive outlook comes after Johnson Associates predicted that bonuses would fall by as much as 20% due to Trump’s ongoing trade war — and the projections can fizzle if markets swoon in the second half of the year.
The broad-based S&P 500 has gained roughly 7.9% year to date, while the tech-heavy Nasdaq has surged more than 9% — with both indexes repeatedly breaking their all-time highs in the past month.
The blue-chip Dow Jones Industrial Average has ticked up by around 4% since the start of the year.
Meanwhile, the nation’s GDP rebounded from a 0.5% annualized contraction in the first quarter to 3% growth in the subsequent three-month period, and inflation has edged down from 3.0% in January to 2.7% in June.
Last year, the average annual bonus climbed by nearly 33% to $244,700, marking the first significant increase since the coronavirus pandemic.
In total, the amount paid out in bonuses reached a record $47.5 billion, according to estimates from New York State Comptroller Thomas DiNapoli.
Wall Street accounted for 19% of the entire state of New York’s tax collection, and a total of 7% of the city’s revenue year, underlining the industry’s importance to the Big Apple, according to DiNapoli.
There were 201,500 working in the New York finance industry, up from 198,400 the year prior and exceeding the previous peak seen in 2000.
The staffing levels may begin to plunge as finance companies lean into artificial intelligence technology to cut costs.
“In the short term, it’s going to reduce headcount: ‘We’re not going to need 10 analysts, we’re going to need five,’” Johnson said.
“It will lead to efficiencies. And the people who remain will be paid even more.”
This story originally appeared on NYPost
