Economist at Bulge Bracket
Two students at my college (a solid target, but top econ undergrad) went into "economist" roles at bulge brackets. They had heavy econ/macro research profiles, taking masters and PhD-core macro classes. I can't find many people on Linkedin in this role--most seem to be magna/summa econ students interested in macro. Is this a good job out of undergrad? How is the comp and hours compared to other roles (like IB)? I just can't find much information on these roles. I am assuming common exits are to grad school or hedge fund?
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These seem like great roles as they are very high profile and prestigious on the face of it. However, you shouldn't be fooled. There is really no revenue tied to these role. You are basically just a cost center for the bank. Almost needless to say, revenue drivers are what matters.
On ejmr (kind of like wso for econ academia) they say pay for a senior economist goes over 7 figures…odd because I don’t actually understand how this branch helps banks, and nobody is going to use forecasts from GS or MS over Fed/WB/DoT/etc. Could it be worth it for an undergrad with serious economics focus but maybe doesn’t have the chops to be a top economist.
I was in one of these seats until quite recently. Some thoughts:
1) Chief economists can be pulling in 7 figures, but it takes a really really long time to get there - and likely only comes with a heavy administrative workload as well at that point. But you bet Jan Hatzius and the like earn serious money. There are probably less than 5 economists on the street pulling in that money.At the junior levels, base pay is pretty similar to any junior in an S&T slot, with lower and less variable bonuses (hours will be a lot better than most markets seats which are themselves significantly better than IB).
2) You'd be surprised at how bad Fed forecasts are (I worked at the Fed, I know...). More importantly - sell-side economists will publish/update their forecasts at a far higher frequency than large organizations like the Fed, will cover topics that are actually markets-relevant, and most importantly, are available to talk to clients in depth at any time. Good luck getting anyone at the Fed to be willing to talk to you if you're a hedge fund manager.
3) The value add is not in the point forecasts - its in how the economist frames a certain issue, and the views on range/distribution of risks to the view. If you talk to enough sell-side economists, the buy-side client can get a solid sense of the boundaries are of street expectations. This is still often wrong, but if even if it is wrong, you can infer how much price action there can be over a certain miss (at least thats what we'd like to think)
4) As someone on the buy-side know who uses sell-side economic research and talks to these economists - its helpful having someone that I can debate a view with. Most of the time, i come out of a meeting rather re-asured that my view is right and the opposing view is wrong, but I often come out having realized a potential flaw or counterargument to my view that I hadn't considered. The jobs arent completely devoid of value
5) As far as internal value goes - no one at the bank used our forecasts as direct inputs into bank processes (CECL, CCAR, etc.). Our forecasts arent designed to be used in that manner, although the people involved in those processes would check notes with us ever so often. There's a lot more value add for other strategy teams though - for example, a credit client might want to get a macro overview to contextualize potential for credit events. Its a lot easier for our credit stragegists to bring us to a meeting to provide that overview than doing it themselves.
6) This isnt a job one can count on getting straight from undergrad or even from PhD program. Slots rarely open up and getting a spot is mainly being in the right place at the right time with the right skill set. Having a Fed or similar background is also very helpful, even moreso than a PhD.
7) Typical exits are to macro hedge funds or real money accounts with a rates focus. But as i said, people don't leave too often.
Happy to answer more q's if people have any.
Do you know how many seats go to econ undergrads? For someone interested in macro, is this a good job?
Also, do you need a PhD for promotion?
also, noticed someone at a high level position at IMF was in GS research, and a previous CEO of the NY Fed. Is entry back into the government possible?
Hey, I was wondering if you had any thoughts on insight on my situation. My apologies in advance for the long post.
I'm currently on the sell side, working in FX research for a brokerage. I have a BA in Economics, worked as a research assistant at a central bank for 2 years, and have been in my current role just over a year. After getting a some practical experience, I'm really interested in going back to school to strengthen my framework. Our research team is tiny so we spend most of our time trying to make sense of what just happened in markets and how our forecasts need to change. We have hardly any time for deep dives or learning as there's just a constant flow of content we need to crank out.
What I'm wondering is if you have any insight into which degrees I should look into, as I'm not from or currently in the US so I'm pretty out of the loop on how various programs are viewed on the Street, and I have a very clear picture of what I want to get out of the degree. There's so much information on equity research and MBAs on this forum and hardly anything on macro research or the appropriate degrees for those jobs.
I'm still looking to stay in research or strategy, but I'd be willing to join any macro oriented team -- fx, rates, commodities, cross-asset, or economics.
My ideal master's degree would:
- Have a good brand name
- Recruit well at big banks and funds
- Be taught by practitioners
- Be well-taught
- Be a post-experience program
- Have a strong network
- Cover the same topics as a standard MA-level macroeconomics class but link everything back to real-world case studies
- Focus on empirics, realism, lack of reliance on strong assumptions, more papers and projects than math exams in disguise
- Have a class on the history of business cycles and financial crises
- Have a class on economic and financial forecasting
- Have a class on data science
- Have a class on geopolitics
- Have a class on fiscal and monetary policy analysis
- Have a class on money, banking, and shadow banking
- Have a class on the mechanics of various macro products
- Have a class on industrial organization that focuses more on how market structures evolve than analyzing them statically and in isolation
So far, I have found a single program that appears to tick most of these (numerous) boxes: the Master of International Affairs at Columbia SIPA, with a major in International Finance and Economic Policy and a specialization in Data Analytics and Quantitative Analysis. Do you have any insight on this program, or perhaps alternative programs I should consider?
Thank you for your time,
macro-nerd
I worked with a guy who did commodity research who had the masters in internatinoal affairs from SIPA you're speaking of - super smart guy and great at what he does.
I can't speak to your list of classes you want - the most common masters I saw in the broader macro research space (outside of PhDs) were:
-Masters in Economics from NYU
-Masters in Math from NYU
-Masters in Economics from Columbia
-Masters in Computational Finance from CMU
-Masters in Finance from Princeton
-Various engineering masters from a few different schools
As far as I can tell, I don't the street cares too much about what your actual coursework was. Going to one of the New York schools (NYU/Columbia) means you have easier access to on-campus recruiting and the like, which is probably a much better predictor of success of getting street macro research jobs.
As a non-American, the Visa situation probably is something you need to worry about.- you'll have OPT post-masters, but a lot of shops dont sponsor in any capacity/won't accept you if you need Visa sponsorship at any point of time down the road.
"Our research team is tiny so we spend most of our time trying to make sense of what just happened in markets and how our forecasts need to change. We have hardly any time for deep dives or learning as there's just a constant flow of content we need to crank out." - This is what everyone does if you're covering a large country or a specific asset class. If you want to do deep dives on the street, you'll have to find a "Global Economics" team seat. Big deep dives normally become market-irrelevant by the time they're finished unfortunately...
These are awesome jobs in my opinion even though I left my seat.
You're not really thinking about the way in properly though- if you are one of the chosen few that get out of undergrad, you'll have to do one of those 2 year S&T or Research programs depending on the bank. Then you hope that a seat is open and you get placed in it, no one is going to come recruiting specifically for one of these seats for undergrad.
In my case I worked at the Fed (not saying which) out of undergrad and happened to be in touch with the right person at the right time that a seat opened at my (BB) bank.
PhDs are necessarily required for promotion but almost all chief economists will have them. Also if you join straight from undergrad and just work at a bank your entire career as an economist, you run the risk of the bank filling a chief economist opening externally by hiring someone from the Fed IMF etc. If you get into the seat without a PhD, the best career option is probably to either at least get a masters (part time maybe) or switch at some point into pike a Rates/FC strategist type role (or move to buy-side).
Depending on how profile you are it certainly is possible to go back into government. Most people won't because of the associated pay cut.
huh, the guys I’ve heard did had summer internships as “Macro Research Analyst” and joined FT as “Economists.” Maybe are they starting to hire undergrads directly. This guy did do an MA in 4 though…that could explain it.
Did you seriously make two WSO accounts so you could use one to bump your own post?
forgot password to politics_economics, and I am only logged into it on my phone. It was just easier to create a new one. Is that unethical?
Lol no that's fair enough.
I suppose its possible one place structures it like that - also are they economists in the broker-dealer, wealth/asset management, or internal bank? All my above advice is specifically for "sell side economists" i.e. in the broker dealer, who's publishing stuff for buy-side clients of the broker-dealer
im going to pm so I can be more specific
I don't know any serious bank that would employ an undergraduate in economics into an economist position, you'd simply not be qualified enough at that stage. Economics, as you know, is an academic discipline and to work as an economist you need a high level of expertise, which at the very least you will gain after a Masters, but most people who work as economists have a PhD. It's one of the reasons why I eventually gave up on the idea of returning to do an MSc in Economics and further study to become an economist because I just wasn't willing to put in that much effort and time anymore and was happier to just continue to do banking. There's only so many times you can solve for steady states in the Diamond model before you start to lose your mind!
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