At a time when many Americans remain stressed about affordability, Treasury Secretary Scott Bessent has declared that the U.S. economy is no longer in a "K shape," a term used to describe increasing financial inequality between high- and low-income households.
"I got sick of hearing about this K-shaped economy," Bessent said in a CNBC interview on Aug. 4. "I can say here definitively, the K-shaped economy is over."
For years, experts have called the trend where spending and wage growth for high-income Americans' outpaces that of low-income Americans "K-shaped." In December, then-Federal Reserve Chair Jerome Powell said it was "clearly a thing."
"If you listen to the earnings reports for consumer-facing companies that tend to deal with low- and moderate-income people, they'll all say that we're seeing people tightening their belts, changing products that they buy, buying less," Powell said in a news conference.
According to Bessent, that has changed. He said the economy is becoming C-shaped, citing faster wage increases among low-income Americans than those in higher-income brackets.
