Could the DOGE dividend help or hinder Wall Street after the Nasdaq’s worst day since 2022?

Is a DOGE dividend about to fall into the bank accounts of Americans and prompt a major recovery for Wall Street? Proposals for a payout from the Department of Government Efficiency, fronted by Elon Musk, have been met with enthusiasm among consumers, but will it help or hinder markets?

The suggestion that US households could receive a ‘dividend’ payout worth $5,000 was initially floated by James Fishback, CEO of investment firm Azoria. 

In a post on social media platform X, Fishback suggested that 20% of the money saved by DOGE should be sent back to Americans as a tax refund check. With Musk targeting $2 trillion in total savings, a check distributed across 78 million tax-paying households would equate to a $5,000 refund. 

Musk has been transparent about his $2 trillion savings target for the Department of Government Efficiency being a “best-case outcome”, claiming that the department would have a “good shot” at getting $1 trillion. 

If passed, this would still equate to a DOGE dividend of around $2,500 per tax-paying household. But what would the payout mean for Wall Street at a time when the Nasdaq recently suffered its worst day for trading since 2022? 

Could inflation harm Wall Street?

Recent market uncertainty surrounding tariffs and the prospect of trade wars involving different historical trading partners have rolled back optimism for the S&P 500 in 2025. 

Goldman Sachs recently shortened its forecasts for the index to 6,200 by the end of the year, down from initial projections of 6,500. 

Despite a Wall Street rally in the wake of Trump’s resounding US election victory, the S&P 500 has since retraced fully from the post-election pump beginning on November 5, 2024, and has fallen almost 10% since February 19, 2025, as markets struggle to anticipate the President’s policies. 

On the surface, a DOGE dividend worth up to $5,000 sounds like a catalyst for growth for US markets, with investors using the money to bolster their portfolios or build savings accounts. But the threat of runaway inflation could lead to a mass devaluing of the dollar and widespread consumer price increases. 

Fortunately, we have a recent historical precedent to observe in the form of the government’s stimulus packages distributed to support households during the pandemic. 

In total, three rounds of stimulus checks worth $814 billion across 476 million payments were paid to US households between 2020 and 2021. 

In the months that followed, we saw an initial tech stock rally on Wall Street, as well as a significant cryptocurrency market rally, before high inflation pushed stocks lower. 

According to the Federal Reserve Bank of St Louis, the stimulus payouts correlated to the excess inflation recorded in the United States, with it contributing an estimated 2.6% to inflation figures in the US. 

Given that $814 billion falls close to Musk’s estimates for the total amount of savings DOGE could raise, we may see similar levels of stimulus enter the pockets of consumers should the dividend materialize. 

With the dividend payout expected to occur as a single payment like a tax rebate, this would rapidly increase the spending power of US consumers overnight, which could push demand for goods and services far higher and send price inflation soaring. This would have a knock-on effect for interest rates as the Federal Reserve attempts to calm runaway spending. 

The bullish case for the DOGE dividend

Despite widespread concerns over the inflationary impact of the DOGE dividend, Fishback claims that the payouts would be nothing like lockdown stimulus packages. 

Fishback suggests that the stimulus payouts during the pandemic amid lockdowns and labor shortages compounded the effect of inflation, but that the macroeconomic backdrop today is disinflationary. 

Instead, Fishback views the DOGE dividend as a tax refund, where the average check from the IRS is $3,100 and is largely transferred into savings or debt repayments. 

Should the DOGE dividend be largely reinvested, it would represent a victory for Wall Street at a time when tariffs are adding to the uncertain outlook for investors. But for such a significant one-off payment to be distributed across 78 million households without causing a significant spike in CPI seems fanciful. 

One bullish case would be that we see a surge in discretionary spending across sectors like apparel, electronics, and home goods in a similar way to the post-pandemic landscape saw an increase in department store spending by 23.5%, with e-commerce experiencing growth of 11% at times. 

If this discretionary spending galvanizes slowing markets without carrying an inflationary aftershock, we could see an upturn in fortunes for stocks across multiple industries. 

When will the dividend arrive? 

There’s no time like the present for Wall Street as sell-offs continue to impact market performance, but Americans may face a wait before their DOGE dividends materialize. 

While the Republicans have control of the Senate and House of Representatives, an executive order could speed up the process of distributing payouts. However, this would all be dependent on the approval of the Trump administration. 

However, a bigger danger to the DOGE dividend is the savings that the department has made. Although its website claims to have saved over $100 billion, few federal departments are reporting spending reductions in Trump’s first month. 

Even if savings of $100 billion are accurate, this would result in a far lower dividend for US households. 

With Musk claiming that DOGE will be shut down on July 4, 2026, it may take some time for the department to fully realize its savings before prospectively distributing them to taxpaying citizens. 

Wall Street will have to wait

At present, it seems far more likely that Wall Street will have to battle out the challenges of tariffs and geopolitical uncertainty without a boost from the DOGE dividend. 

Given the long-term resilience that the S&P 500 has consistently shown, it’s likely that investors won’t have to suffer stock market losses for long. But at a time when sentiment in the financial markets is at a low, it’s understandable that the news of a possible payout from the Department of Government Efficiency is such a catalyst for optimism. 

Frustratingly for investors, the prospect of a $5,000 DOGE dividend is something that’s unlikely to materialize any time soon.

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