Wall Street Bonuses Powered New York's Economy in 2024. Some Worry They Peaked.

Bonuses account for a big chunk of what many employees earn at financial firms each year

- Krystal Hur

Wall Street bonuses surged 31% last year on rising markets and a rebound in dealmaking activity, delivering a boon for the industry's hometown economy. Some are already wondering how long it is going to last.

The average bonus rose to a record $244,700 last year, up from $186,100, according to the New York state comptroller's office. Adjusted for inflation, it is the highest figure since 2021, before the Federal Reserve's interest-rate increases began to crimp dealmaking.

Banks, brokers and investment firms paid out bigger bonuses last year as the markets rallied and dealmaking began to recover from a two-year malaise. Optimism for the future also fueled their rise, and finance executives began to bet that the uptick in activity would continue once President Trump returned to the White House.

There are early signs, though, that 2025 might not play out as many bankers expected. The market's rally has faded, and signs of continuing inflation and concerns over Trump's tariffs on imports have muddied the outlook for interest rates. And many of Wall Street's biggest players have taken steps to cut staff.