Treasury chief declares end of K-shaped economy amid mixed data

During one outlet's interview, Treasury Secretary Scott Bessent declared the K-shaped recovery over, claiming lower-income households are finally catching up with richer peers. He highlighted a 2% real-wage increase for the bottom 25% of workers and credited the One Big Beautiful Bill Act’s tax cuts for boosting disposable income. Bank of America’s chief U.S. economist observed that year-over-year consumer spending, excluding gasoline, has stopped following a K-trend, citing stronger job growth and falling fuel prices.

However, Goldman Sachs and Morgan Stanley argue that higher gasoline costs have erased much of the promised tax benefit, while the Federal Reserve Bank of Atlanta reports only marginal wage gains for the lowest quartile compared with the top. Economists such as Joe Brusuelas and Mark Zandi warn that equity-driven wealth gains remain concentrated among high earners, sustaining the underlying K-shape.