The actions taken after Trump's 2.0 started do not completely align with Wall Street's expectations, and some actions have even caught Wall Street by surprise.

The trading volume in January was the slowest in over a decade. The valuable tax breaks for hedge funds and private equity firms are under threat. Major Banks were questioned about whether they have 'downgraded' certain clients.

When Trump was elected in November, these complex situations were not part of Wall Street's plan, triggering discussions aboutmergers and acquisitions.bubbles, looser regulations, and optimistic forecasts regarding a more favorable attitude toward large companies on Wall Street in Washington, D.C.

Conversely, according to LSEG, as of January, the number of announced merger and acquisition deals by bankers in the USA is the lowest since January 2014.

(Image source: finance.yahoo)

The Trump administration also indicated that they would not provide a free pass for large mergers by blocking potential alliances between HP Inc (HPE) and its competitor, Juniper Networks (JNPR).

The new uncertainties surrounding the president's tariff plan have left many businesses unsure about when to take significant action and what direction borrowing costs may head in the coming weeks and months.

On Monday, UBS Group CEO Sergio Ermotti stated, "From a geopolitical perspective, the uncertainty around tariffs will certainly create some uncertainty that could empower us to enable everyone to execute."

Ermotti noted that the decision for this year was not made in one quarter or one month.

It is certain that, compared to other times, new deals in January are generally slower.

Scott Sperling, co-CEO of THL Partners, stated that historically high levels of Company Valuation may also play a role in the slowdown of deal-making that began in 2025.

Sperling mentioned that this is an unusual combination, which could itself make certain types of M&A and certain types of transactions potentially yield some financial returns.

So far, the economic recession has not pulled down large Banks Stocks.

As of Monday, since the beginning of January, JPMorgan (JPM), Goldman Sachs (GS), Citigroup (C), and Wells Fargo & Co (WFC) have risen by 12% to 15%, while Bank of America (BAC) and Morgan Stanley (MS) have increased by 6% to 9%. During this period, all stocks have outperformed the major stock indices.

"What you are doing is wrong."

In the first few weeks of Trump 2.0, a major unexpected development on Wall Street was the heightened political intensity.

Trump publicly confronted Brian Moynihan, the CEO of Bank of America (BAC), at the World Economic Forum over a controversial claim that has raised concerns in conservative circles: customers are "debanked" due to their personal beliefs or because they are part of the crypto industry.

Trump also seemed to include JPMorgan CEO Jamie Dimon in his adversarial group. JPMorgan and Bank of America are the two largest banks in the USA. Both companies have denied allegations that they cut off services to customers based on personal beliefs.

Trump told Moynihan, "I don't know if the regulators are doing this because of Biden or for some other reason, but you, Dimon, and others, I hope you open your banks to conservatives because what you are doing is wrong."

Last week, during hearings in the Senate and House committees, Republicans have been focusing on banking issues. Massachusetts Democratic Senator Elizabeth Warren even stated her support for this topic, indicating her agreement with Trump's viewpoint.

However, banks remain optimistic that if regulators ease some requirements that force banks to lose certain customers, resolving this issue could ultimately be positive for them.

They believe that rules such as the USA Bank Secrecy Act do not encourage Banks to deal with clients considered high-risk—more explicit regulation is needed in this regard.

Industry lobbyists are pushing for this situation to occur. A spokesperson for the banking advocacy group BPI stated in a statement to Yahoo Finance that an important part of the solution is to repair the regulatory structure.

After the White House made it clear that Trump wishes to eliminate a tax deduction known as the carried interest deduction, lobbyists from the private equity and hedge fund Industry may also unexpectedly be busy this year.

It allows investment managers to pay a lower capital gains tax on the income they earn from their work as compensation. This is no small matter, as many capital gains are taxed at 23.8%, while the tax rate on normal wage income can be twice that rate.

White House Press Secretary Karoline Leavitt stated last week, "The president is committed to working with Congress to get this done."