When Zohran Mamdani swept to victory in New York City’s mayoral race on November 4th, securing a record turnout not seen since 1969, the 34-year-old democratic socialist achieved something remarkable: he forced Wall Street to contemplate working with a man many financiers had spent millions trying to defeat. The Queens assemblyman’s decisive win over Andrew Cuomo, the former governor running as an independent, and Republican Curtis Sliwa marked more than a political upset. It represented a fundamental test of whether America’s financial capital can accommodate a leader who doesn’t believe billionaires should exist.

The anxiety emanating from lower Manhattan is palpable. « We cannot have a socialist in the greatest capitalist city in the world, » one hedge fund manager confided. Yet this is precisely what New York now has. Mr Mamdani’s campaign promises read like a progressive wishlist: freezing rent, city-owned grocery stores, universal childcare, free bus service, and most alarming to the pinstriped set, a 2% flat tax on incomes above $1m alongside raising the corporate tax rate to 11.5%. His team estimates these measures could generate $9bn, though the arithmetic remains suspiciously vague.

Wall Street’s response has evolved through distinct phases: denial, resistance, and reluctant pragmatism. During the campaign, heavyweight investors deployed their chequebooks with unusual vigour. Bill Ackman poured $1.75m into pro-Cuomo and anti-Mamdani groups, Dan Loeb contributed $700,000, and Michael Bloomberg and Alex Karp joined the effort. Even Elon Musk weighed in on the eve of the election, urging voters to “VOTE CUOMO!” on X.

Their investments proved futile. As betting markets pushed Mr Mamdani’s odds to 95%, a curious transformation occurred. The same financiers who had condemned him began calculating how to work alongside him. Mr Ackman’s election-night message captured this shift perfectly: « Congrats on the win. Now you have a big responsibility. If I can help NYC, just let me know what I can do. » The olive branch, extended via social media, represented either genuine reconciliation or shrewd positioning—possibly both.

This pivot reflects an uncomfortable truth that Wall Street understands well: Mr Mamdani will set the tone for whether New York remains business-friendly, even if he lacks direct oversight of the financial district. The mayor’s office may not regulate trading floors, but it shapes the environment in which they operate. Robert Steel, longtime Wall Street executive under Mr Bloomberg, puts it bluntly: “There are 30 to 50 people who really run the city.” His implication is clear—Mr Mamdani’s appointments will matter far more than his rhetoric.

Some financiers find reasons for cautious optimism. Antonio Weiss, a veteran Wall Street figure, praised Mr Mamdani’s outreach efforts: “He has been effective at reaching out and expanding his coalition.” More surprisingly, he supports targeted tax increases if paired with efficiency improvements and investment in childcare that helps retain young families. This pragmatic stance reflects a recognition that New York’s high living costs—one-bedroom apartments now fetch $5,000 monthly—threaten the city’s competitiveness.

Ralph Schlosstein, chair emeritus of Evercore, struck a conciliatory tone: “He offered hope and opportunity…it’s time for everybody to pull together.” The record turnout, with over 2m voters, lends Mr Mamdani a democratic legitimacy that even his detractors must acknowledge.

Yet scepticism runs deep. Several financiers question whether Mr Mamdani’s moderation is genuine or tactical. One dealmaker believes “his movement to the middle seems to be insincere,” citing inflexible positions on economic policy and the Israel-Palestinian conflict. Cromwell Coulson, CEO of OTC Markets Group, warned that whilst Mr Mamdani’s ideas are “well-intentioned,” some businesses might relocate if New York becomes inhospitable. “It won’t be day one, but you will see where our hiring footprints go,” he cautioned.

The real estate sector faces particular turbulence. Rent freeze on stabilised apartments—a measure attempted by Bill de Blasio before Eric Adams reversed it—has spooked landlords and lenders alike. Paul Rahimian of Parkview Financial adopted a “hold and see” approach to new loans pending the election. “There are landlords now no longer making money but whose properties are costing them money every year,” he explained. Isaac Toledo of BH Group anticipates a busy 2026 relocating clients to Florida should Mr Mamdani’s policies prove onerous.

Mr Mamdani, for his part, has worked to court the business community. He attended multiple CEO meetings organised by the Partnership for New York City, spanning banks, private equity firms, and law firms. He even spoke with Jamie Dimon, JPMorgan Chase’s CEO, who offered assistance. Yasser Salem, chair of OneNYC, is assembling a business advisory council: “We are highly focused on building demonstrations of trust.”

Several obstacles may constrain Mr Mamdani’s ambitions. Governor Kathy Hochul has already declared opposition to tax increases on the wealthy, setting up a potential clash with City Hall. Any hikes require Albany’s approval, and Christina Greer, political scientist at Fordham University, predicts the process will be “incredibly slow.” Peter Orszag, Lazard’s CEO, expressed hope that “the worst fears… are not realized.”

Some business leaders are preparing active resistance. David Schwartz of the New York Association of Grocery Stores vows to oppose city-owned groceries, calling them unworkable and unfair. Critics also point to Mr Mamdani’s limited administrative experience governing such a complex city. Donald Trump has labelled him a “communist” and threatened to withhold federal funding—accusations Mr Mamdani rejected: “Donald Trump, since I know you’re watching, I have four words for you: Turn the volume up.”

The broader political context adds another layer. Mr Mamdani’s victory, alongside Democratic wins in Virginia and New Jersey, suggests renewed strength for the party ahead of midterm elections. Analysts view these results as an “anti-incumbent swing” that could help Democrats reclaim the House, where betting markets assign a 72% probability. Jamie Cox of Harris Financial Group called the elections “a very big wake-up call for Republicans.”

Wall Street now confronts an uncomfortable experiment. Can New York City, the beating heart of global capitalism, function under a socialist mayor? Peter Cardillo of Spartan Capital Securities believes concerns are “overexaggerated,” predicting Mr Mamdani will face obstacles implementing his agenda. Others are less sanguine. Dennis Lyulkin, CEO of Cardiff, calls it “a risk I’m watching in 2026,” warning that “if other major cities follow this pattern, markets may price in more tax and regulatory risks.”

The coming months will reveal whether Mr Mamdani’s progressive agenda can coexist with New York’s financial power, or whether the tension proves irreconcilable. For now, Wall Street has grudgingly accepted reality, hoping that rhetoric gives way to pragmatism. As one investor observed, “Actual policy often turns out much more benign than campaign rhetoric.” New York’s business elite is banking on it.

licence photo : https://creativecommons.org/licenses/by-sa/4.0/

Bingjiefu He – Own work Zohran Mamdani at the Resist Fascism Rally in Bryant Park on Oct 27th 2024