The Department of Government Efficiency (DOGE) — set to be led by Elon Musk and Vivek Ramaswamy — is the talk of the town, but Wall Street is split on President-elect Donald Trump’s plan to drastically curb government spending.
“A lot of bankers, they’re like dancing in the street because they’ve had successive years and years of regulations, a lot of which stymied credit,” JPMorgan CEO Jamie Dimon said at a conference early this week.
“Traders are salivating — there’s lots of money to be made with this wild volatility,” a longtime stock trader told The Post.
Others see no cause for celebration..
In a recent LinkedIn post, hedge fund billionaire and Bridgewater founder Ray Dalio — and former boss of Pennsylvania Senator-elect David McCormick — said that cutting the government could result in a “purge” of anyone not aligned with Trump’s vision and mirror “the hard-rightist states in the 1930s.”
One banker, who voted for Trump, told The Post he just doesn’t see DOGE actually doing much.
“People think Trump won’t actually make cuts because it will kill jobs and hurt his numbers,”
Another source, who also voted for Trump, said he doesn’t believes it’s possible at this point to undo decades of damage.
“It won’t move the needle” when it comes to making a dent in the $36 trillion national debt, he told The Post.
The proposed new department is aimed at slashing a staggering $2 trillion from the federal budget and hundreds of thousands of regulations by July 4, 2026 — the 250th anniversary of the United States.
DOGE’s bold ideas are already having big consequences.
Last Tuesday, shares of H&R Block and Intuit, which makes the TurboTax software, plunged after reports of a possible IRS app, courtesy of DOGE.
In the past few weeks, equity research analysts have scrambled to release reports on what all DOGE will mean for clients.
Financial firm Jefferies has warned that government contractors like Booz Allen Hamilton and Leidos are “at risk” for severe cuts.
A hedge fund manager told The Post that he thinks DOGE will lead to a “massive downtick” for other contractors like Lockheed Martin and Boeing. He summed up the sentiment he’s hearing as “How do we short the Beltway?”
But, he believes DOGE will be a success.
“Changes need to be big and it needs to work —Trump can’t find money for tax cuts otherwise,” he said, noting that Trump will need to re-up the 2017 tax cuts that are set to expire this year.
Dimon has enthused that the impending deregulation could mean that possible mergers — such as Capitol One and Discover, which have been in limbo since February — would finally get approved.
President Ronald Reagan tried to enact drastic cuts in 1984 with the Private Sector Survey on Cost Control, known as the Grace Commission. Some 2,478 cuts, forecast to save the government $424 billion over three years, were proposed. Reagan promoted the plan promising that it would help “drain the swamp” but the then-Democratic Congress never enacted the changes suggested.
Sources say Ramaswamy and Musk are more likely to get their cuts through the Republican-controlled Congress.
While they will not take an officials role in the government, instead functioning as outside advisers, they have enlisted former advisors and even friends, who spoke on the condition of anonymity, to help vet candidates for government roles like the Office of Management and Budget, sources told The Post.
“Having the right person in OMB is key — it’s the only way anything gets done,” one source told the Post.
These people will be able to actually implement Ramaswamy and Musk’s recommended cuts in the federal budget.
DOGE has also captured the imagination of younger bankers who see potentially being a part of it is a way to serve country.
“It’s the financial form of enlisting in the military,” one bulge bracket banker told The Post.
Another junior banking source said he has applied to join the “lean team of small-government crusaders” -— as Ramaswamy and Musk have described it — because he believes they can prevent “the end of the West” by “getting America back into the black.”
The fascination with DOGE underscores a deep interest in Trump’s presidency and what it could mean for Wall Street.
Titans of industry have already been more involved with this transition than any other transition in recent history.
Apollo CEO Marc Rowan, Formed Fed Chair Kevin Warsh, and hedge fund titan Scott Bessent have all recently met with Trump about rolEs in the administration.
Other prominent New Yorkers like Cantor Fitzgerald CEO Howard Lutnick, hedge fund billionaire John Paulson and Blackstone chair Stephen Schwarzman have worked closely with the president-elect — hosting fundraisers, quietly advising, and in Mr. Lutnick’s case helping with the transition and joining the cabinet.
But others in finance are viewing it all with a mix of pragmatism and opportunism.
A skeptical Manhattan-based trader in his 50s believes it’s unlikely anything will truly change or that DOGE budget cuts will “move the needle.”
But, he said, no matter what happens, “there’s money to be made either way.”
This story is part of NYNext, a new editorial series that highlights New York City innovation across industries, as well as the personalities leading the way.
