According to The Wall Street Journal, a strong first half had initially signaled a good year for Wall Street, but recent political and market events will likely drive profitability and compensation lower, according to a report released by New York state Comptroller Thomas DiNapoli.
Profits could total about $5 billion in the second half after generating an estimated $10 billion in the first half, the report said.
Mr. DiNapoli said profits could wane due to rising interest rates, litigation costs associated with settlements with the federal government and the recent political turmoil in Washington over the budget and debt ceiling, according to the report.
“Washington’s inability to resolve budget and fiscal issues is bad for business,” Mr. DiNapoli said in a statement. “Failure to resolve the federal budget and debt ceiling impasse could disrupt the economy and hurt New York City and New York state.”