Our new compensation report says macro traders are the highest paid. Macro traders trade FX. They also trade rates. Top rates traders at Goldman Sachs are therefore very likely to be among the group that always earns $9.5m+.
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In the first quarter, though, Goldman Sachs’ highly paid rates traders made a mistake. Mike Mayo, the veteran banking analyst prone to frank-speaking, says a fire is probably being lit underneath them as a result.
Their mistake was forgivable, but maybe not if you’re being paid for immaculate foresight. The Financial Times says Goldman’s rates traders, like most macro hedge funds, were positioned in anticipation that interest rates would fall in 2026, while simultaneously expecting a decline in tech and AI stocks. (This sounds a bit like they too are a hedge fund. The FT says Goldman’s rates traders take more risk than its other traders who also take more risk than the rest of the sell-side.)
The year has not worked out as planned. Interest rates may no longer fall as inflation inspired by the Middle East war takes hold. Tech stocks have held up and are rising again. And Goldman’s rates desk has floundered.
Problems on the desk are being blamed for the 10% year-on-year decline in Goldman Sachs’ fixed income sales and trading revenues in the first quarter. Comparable revenues were up 29% at Morgan Stanley and 21% at JPMorgan.
The gnarly appendage of blame may point towards one particular man. The FT notes that Anshul Sehgal runs Goldman’s rates group. Sehgal joined from Bank of America 15 years ago and sits on the firm’s operating committee. He will now feel the heat to improve performance. Fortunately, his boss is likely to be sympathetic: the FT notes that Ashok Varadhan, head of the markets business at Goldman Sachs, cut his teeth in rates trading too.
Separately, hedge funds had a hard time in March, but April is a different matter. Reuters reports that April 2026 is not the cruellest month for hedge funds, but is their best month for over a decade.
This verdict is derived from the Goldman Sachs quarterly hedge fund report, which says that long-short equities funds have done particularly well. Bloomberg reports that Point72, Millennium and Jain Global have a good start to April, with gains of over 2% in the first ten days.
However, Business Insider reports that BlackRock has simultaneously released its own hedge fund report, which says that investors should be cautious around hedge funds, because their value is “not inherent.” In this circumstance, the “premium on manager skill” is greater, says BlackRock, suggesting portfolio manager pay might rise, again.
Meanwhile
The six largest US banks cut 5,000 jobs in the first quarter, even as profitabilty soared. (Bloomberg)
We are in the era of the “mega layoff.” Witness Snao, Oracle, Amazon and Block. (WSJ)
It’s a bad time for recruiters in Europe and the outlook is uncertain for the rest of the year. (FT)
Tax-loss harvesting strategies where securities are sold at a loss to offset gains elsewhere in a portfolio are growing in popularity. Quant hedge funds have pioneered new systems that use leverage and algorithmic trading to buy and short securities at scale, and to systematically realise losses on positions. (FT)
Cecilia Culver, was hired as an assistant economist by EY, but now she’s been dismissed after her speech decrying Israel’s treatment of Gaza at her graduation ceremony went viral. (FT)
Jamie Dimon didn’t sell any of his stock in JPMorgan until 2023 when he sold $180m. Then he sold $233m last year, $20m in February and $41m this week. He still has $1.9bn to go. (WSJ)
Singapore’s family office want to invest in AI but lack the technical expertise to do so. (StraitsTimes)
The EU is thinking of making it easier for firms to do deals based on “innovation, investment and resilience of the internal market.” (FT)
Barclays CEO CS Venkatakrishnan is saying fine things about the Middle East and Saudi Arabia and says Barclays still wants a Saudi license: “The attractiveness of the UAE, the strength of the Saudi economy, will continue to be strong.” (Bloomberg)
CS Venkatakrishnan says he wishes that Barclays had nothing to do with Tricolor and Market Financial Solutions. (Semafor)
Nearly nine out of 10 bank staff earning at least 1 million euros ($1.2 million) a year in 2024 were men. (Reuters)
Cybercriminals are stealing recruiters’ identities to hustle job seekers out of money. People posing as real recruiters send emails approaching candidates for real jobs, then ask for fees to amend CVs. (WSJ)
Angst of the Goldman Sachs MD. “There was one particular mathematical formula that is essential to understanding equity derivatives (the Black Scholes formula) that I never understood. Regardless of any positive feedback or promotions I received over the years, I felt like an imposter. I felt like I had tricked my bosses and co-workers into thinking that I was a lot more competent than I was.” (Upbuild)
The head of France and Benelux for Kepler Chevreux has a wife known for writing dark erotic fiction. (FT)
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