The Department of Government Efficiency (DOGE), which will be headed by Elon Musk and Vivek Ramaswamy, is a hot topic, but Wall Street is divided over President-elect Donald Trump's plan to drastically cut government spending. .
“A lot of bankers are kind of dancing in the street because there's been regulations that have been going on for years and a lot of them are “This is because it has been a hindrance.”
“Traders are salivating. There's a lot to make with this intense volatility,” a longtime stock trader told the Post.
Some people see no reason to celebrate.
Recently LinkedIn PostRay Dalio, the hedge fund billionaire and founder of Bridgewater, and David McCormick, the former boss of Pennsylvania Sen. He said there would be a “purge” of people who do not sympathize with the government, and that it could reflect “extreme right-wing countries around the world.” 1930s. ”
One banker who voted for Trump told the Post he doesn't think DOGE is actually doing much.
“People think President Trump won't actually make cuts because it will kill jobs and hurt the numbers.”
Another official, who also voted for Trump, said he believed it was impossible to undo decades of damage at this point.
“The needle is not moving” when it comes to reducing the $36 trillion national debt, he told the Post.
The proposed new department aims to cut a staggering $2 trillion and hundreds of thousands of regulations from the federal budget by July 4, 2026, the 250th anniversary of the United States' founding.
DOGE's bold ideas are already having a big impact.
Last Tuesday, shares of Intuit, the maker of H&R Block and TurboTax software, Plunging after the news IRS app possibilities, courtesy of DOGE.
Over the past few weeks, equity research analysts have rushed to release reports on what DOGE means for their clients..
Financial firm Jefferies has warned that government contractors like Booz Allen Hamilton and Leidos are “at risk” of deep cuts.
One hedge fund manager told the Post that he believes DOGE will lead to “significant deterioration in performance” for other contractors such as Lockheed Martin and Boeing. He summarized the sentiment he's hearing: “How can we shorten the beltway?”
But he believes DOGE will be successful.
“We need big changes, and they need to work. Otherwise, President Trump won't be able to find funding for the tax cuts,” he said, adding that Trump needs to re-enforce the 2017 tax cuts, which expire this year. He pointed out that there is.
Mr. Dimon said enthusiastically that the impending regulatory relief could finally lead to approval of potential mergers such as Capitol One and Discover, which have been stalled since February.
President Ronald Reagan tried to enact deep cuts In 1984, an inquiry into private sector cost control known as the Grace Commission was carried out. Approximately 2,478 reductions expected to save the government $424 billion It was proposed over three years. President Reagan promoted the plan, promising it would help “drain the swamp,” but the Democratic Congress at the time never enacted the proposed changes.
Mr. Ramaswamy and Mr. Musk are likely to win benefits in the Republican-controlled Congress, people familiar with the matter said.
Although they do not serve as government officials and instead function as outside advisors, former advisors and even friends work together on condition of anonymity to vet candidates for government roles such as the Office of Management and Budget. I'm getting it. Officials told the Post.
“Having the right people at OMB is key and that's the only way to get anything done,” one official told the Post.
These people could actually implement the federal budget cuts recommended by Ramaswamy and Musk.
DOGE also captures the imagination of young bankers who see joining DOGE as a way to serve their country.
“This is an economical form of joining the military,” one bulge bracket banker told the Post.
Another junior banker said he volunteered to join what Mr. Ramaswamy and Mr. Musk described as “a lean team in a small-government crusade” because they wanted to “bring America back into the West.” “I believe that we can prevent the 'end of the Western world,'” he said. black. “
The fascination with DOGE highlights deep concerns about the Trump presidency and what it means for Wall Street.
Industry giants have already been more involved in this transition than any other in recent history.
Apollo CEO Mark Rowan, new Federal Reserve Chairman Kevin Warsh, and hedge fund mogul Scott Bessent recently met with President Trump about their roles in the administration.
Other prominent New Yorkers also hosted the fundraiser, including Cantor Fitzgerald CEO Howard Lutnick, hedge fund billionaire John Paulson and Blackstone Chairman Stephen Schwartzman. Mr. Lutnick has worked closely with the president-elect, quietly providing advice and, in Mr. Lutnick's case, helping with the transition and cabinet. .
But others in the financial industry see everything with a mix of pragmatism and opportunism.
A skeptical Manhattan-based trader in his 50s thinks it's unlikely that anything will really change, and that DOGE's budget cuts are unlikely to “make a big difference.”
But no matter what happens, he says, “there's money to be made either way.”
This article is part of a new editorial series called NYNext, which focuses on innovation across various industries in New York City and the people leading the way.
