Trump Tariffs Could Slash Wall Street Bonuses in 2025
Wall Street faces massive bonus cuts in 2025 as Trump’s tariffs stall IPOs and dealmaking. Traders win big—but most bankers face shrinking paychecks.

Wall Street is facing a sharp reversal in bonus expectations for 2025, as renewed trade tensions and a sluggish IPO market are casting a long shadow over financial sector pay. Compensation across nearly all corners of Wall Street is projected to decline, with initial optimism from late 2024 now giving way to concern.
According to new estimates by compensation consulting firm Johnson Associates, investment bankers focused on initial public offerings (IPOs) are expected to take the biggest hit, with bonuses projected to fall by as much as 20% compared to last year. That’s a stark shift from earlier forecasts that had predicted a 25% increase in IPO-related payouts.
“Hopefully in a few months we'll be proven wrong and the outlook will improve,” said Alan Johnson, managing director of Johnson Associates. “But I wouldn’t bet on it.”
Trump’s Tariffs Disrupt Financial Markets
The change in compensation expectations comes after President Donald Trump’s sweeping announcement of “reciprocal” tariffs on global trade partners. The announcement sent markets reeling and brought dealmaking — especially IPO activity — to a near standstill in recent weeks.
Although the stock market has since regained some ground, the uncertainty around the full scope of the new tariffs has caused many companies to pause their IPO plans. This slowdown is also expected to pressure the private equity sector, which relies on successful exits and public listings to generate returns.
Johnson Associates warned that the ripple effect of the tariffs and delayed IPOs could “clog up” the entire private investment pipeline, affecting returns, fundraising, and future hiring.
Sector-Wide Compensation Cuts Likely
The expected compensation decline isn’t limited to IPO bankers. Hedge fund managers, private equity professionals, M&A advisors, retail and commercial bankers, and even corporate support staff are all forecasted to see their paychecks shrink by up to 10% this year.
One of the few bright spots: traders. With markets experiencing increased volatility, equity traders and teams that sell trading strategies could see their bonuses rise by as much as 25%. Debt underwriters and professionals in secondary markets may also benefit slightly, according to the report.
2025 Bonus Forecast Turns from Optimistic to Uncertain
Last November, Johnson Associates had painted a more hopeful picture, projecting 2025 to be one of the best compensation years in the last five. That optimism has quickly faded.
Now, the outlook for the rest of the year depends heavily on geopolitical developments — especially how global trade disputes unfold. The Trump administration recently announced a trade agreement with the United Kingdom, its first since introducing the tariff plan. But several key negotiations with other nations remain unresolved.
At the same time, the Federal Reserve is holding off on further interest rate changes, signaling that it’s watching trade uncertainty closely as it weighs inflation and labor market risks.
Wall Street Faces a Tighter Job Market
Following sharp compensation cuts in 2022 and flat payouts in 2023, the current downshift could be the most significant decline since the market correction two years ago. And this isn’t just about bonuses.
“If this trend continues, we expect less hiring and more layoffs across the industry,” Johnson said.
In a climate where deal volume is slowing, IPO activity is paused, and geopolitical tensions are flaring, Wall Street’s high paydays — and jobs — are suddenly at risk.
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