Opinion | Why Did Wall Street Get Trump So Wrong?

Donald Trump’s 2024 election sent many finance types into spasms of anticipatory ecstasy as they imagined freedom from regulations, taxes and unfamiliar pronouns.“Bankers and financiers say Trump’s victory has emboldened those who chafed at ‘woke doctrine’ and felt they had to self-censor or change their language to avoid offending younger colleagues, women, minorities or disabled people,” The Financial Times reported a few days before Trump’s inauguration.

It quoted one leading banker crowing — anonymously — about finally being able to use slurs like “retard” again.The vibes had shifted; the animal spirits were loose.“We’re stepping into the most pro-growth, pro-business, pro-American administration I’ve perhaps seen in my adult lifetime,” gushed the hedge fund manager Bill Ackman in December.One Wall Street veteran, however, understood the risk an unleashed Trump posed to the economy.

After Trump’s victory in November, Peter Berezin, chief global strategist at BCA Research, which provides macroeconomic research to major financial institutions, estimated that the chance of a recession had climbed to 75 percent.“The prospect of an escalation of the trade war is likely to depress corporate investment while lowering real household disposable income,” said a BCA report.The surprising thing isn’t that Berezin saw the Trump tariff crisis coming, but that so many of his peers didn’t.

You don’t have to be a sophisticated financial professional, after all, to understand that Trump believes, firmly and ardently, in taxing imports, and he thinks any country that sells more goods to America than it buys must be ripping us off.All you had to do was read the news or listen to Trump’s own words.

Yet Berezin was an outlier; most of the people who make a living off their financial acumen had less understanding of Trump’s priorities than a casual viewer of MSNBC.On Monday, as stocks whipsawed on shifting news and rumors about the tar...