Morning Coffee: "It's worse than COVID" as banks interview, but don't hire. What if Trump imposes tariffs on money?

A refrain of the past few years has been the complaint that wary of making mistakes, banks have taken longer to make hiring decisions. The hope in 2025 was that this would come to an end as dealmaking returned and banks were compelled to hire once more. This has not come to pass.

Get Morning Coffee ☕ in your inbox. Sign up here.

Speaking to Business Insider, Brianne Sterling, head of the investment-banking recruiting practice at Selby Jennings, said banks have been interviewing, but they haven't been hiring because - once again - they are delaying recruitment until fairer times when the market (hopefully) improves. "I think we will still see hiring," said Sterling, hopefully. "I just don't think it'll be as aggressive or as much volume as we initially anticipated, but we'll see how the year goes." 

The problem, as ever, is the lack of visibility needed for deals. Private equity firms are still sitting on the sidelines with over a trillion in dry powder to invest, and multiple trillions locked up in the portfolio companies they'd dispose of. Banks like Goldman Sachs have talking of an "inflection point" for the return of private equity deals for the past nine months, but as of last week, the Financial Times reports that TDR Capital is planning to sell its stake in David Lloyd gyms from one of its funds to another because “the IPO markets are closed.”

The problem is Trump, and tariffs, and the refinement of the post-WW2 political order. “The level of uncertainty is a little bit higher, and that has kept some things on the sidelines,” said Goldman Sachs' CEO David Solomon diplomatically last week. “The more we can have certainty on the policy agenda as we move forward, the better that’s going to support capital investment and growth.”

Goldman is already clearing out its bloated vice president (VP) ranks to prepare for the year ahead. Eric Li at market intelligence firm Coalition Greenwich suggests things may be worse for the industry than Solomon is making out. Dealmaking is "frozen," Li told Business Insider. "There aren't any deals going on. It's almost as bad as Covid...." 

Separately, while Trump's on-off-on- tariffs cause chaos for dealmakers and dealmaking jobs, he could also be about to set a bomb under financial markets. 

Writing for the Financial Times, Gillian Tett notes that Trump's trade tariffs may be a prelude to tariffs on the movement of money. His possible intentions are dubbed the "Mar El Lago accord" in memory of the 1985 Plaza Accord, in which the US sought to reduce its trade deficit by engineering the depreciation of dollar. The Japanese Yen soared 46% in the following year, and was blamed for Japan's lost decade. 

Apollo's Torsten Slok outlines the potential Mar El Lago accord here. Slok says it would entail swapping existing US government debt with new US Treasury century bonds and using a sovereign wealth fund to put accumulate and sell EUR, JPY, and RMB to intervene in FX markets to help put additional downward pressure on the US dollar.

FX traders, at least, should be popular this year.

Meanwhile...

"We are now living in a new reality. The daily whiplash of tariff talks is significantly raising uncertainty for CEOs, boards, and sponsors looking to plan, negotiate, and launch deals," say analysts at Morgan Stanley. (Reuters) 

Klarna is fighting the dealmaking drought and has filed for an IPO that would value it at $15bn. (Axios) 

Dealmakers may be suffering, but crypto professionals are not. Crypto is back in a big way and everyone wants a piece of it, including banks. (Bloomberg) 

Bank of America cut 16 bankers in Hong Kong. (Reuters) 

Deutsche Bank has a secret small office in Canary Wharf and it might be closing it. (Financial Times) 

Jane Street wants to double its office space in London and is looking at Deutsche Bank's old headquarters on London Wall. It could end up with an office as big as HSBC. (Financial Times) 

JPMorgan employees have got a chat group to whinge about returning to the office. The "extremely active" chat gets upward of 100 messages a day, according to one member. (Business Insider) 

Balasyny and QRT are trading physical natural gas in Europe. (Bloomberg) 

Goldman Sachs' top four executives received a collective 30% pay rise last year. John Waldron earned $38mn for 2024, finance chief Denis Coleman received $27mn and general counsel Kathryn Ruemmler’s got $22.5mn. CEO David Solomon received $39m. Waldron also got expanded use of the company jet. (Financial Times) 

It's a fine time to be a short seller. London-based Russell Clark has returned from retirement aged 50 for the occasion. “Trump has really blown things apart...We’re probably going to see Trump’s reelection as a sort of cyclical, secular top to asset markets, at least in the US.” (Bloomberg) 

The Big Four might make more job cuts. : “How can you plan for and commit to a large consulting project when you don’t know what your output is going to be because Trump might put a tariff on it? It completely changes your business model.” (The Times) 

Have a confidential story, tip, or comment you’d like to share? Contact: +44 7537 182250 (SMS, Whatsapp or voicemail). Telegram: @SarahButcher. Click here to fill in our anonymous form, or email editortips@efinancialcareers.com. Signal also available.

Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libellous (in which case it won’t.)

Photo by Thomas Park on Unsplash