Treasury Secretary Declares End to K-Shaped Economy, Says Growth Is Shifting to a “C” Shape

Treasury Secretary Scott Bessent told CNBC that the “K-shaped” economy—characterized by divergent outcomes for high- and low-income earners—is no longer a defining feature of the U.S. economy. He asserted that the pattern has been replaced by a “C” shape, in which wage gains among the bottom quarter of earners are beginning to outpace those of the top fourth. The remarks came amid persistent low consumer sentiment and a looming midterm election cycle.

New York Times

The United States has faced elevated inflationary pressures for several years, a situation Bessent linked to tariffs and the ongoing war in Iran, which have driven up gasoline prices. Despite promises of lower prices from the administration, inflation remains a concern for many voters, who have given President Trump negative marks on his handling of the economy. Wealth inequality has historically been high, and analysts note that modest improvements in bottom-quartile wages are unlikely to reverse that trend quickly.

New York Times

Bessent framed the shift to a “C” shape as evidence that recent tax cuts enacted by Republicans are beginning to benefit lower-income households. He suggested that misinformation about the economy fuels downbeat consumer sentiment and that relief will arrive as wage growth at the bottom accelerates. The Treasury Department did not provide details on the specific wage data underpinning his claim.

New York Times

The article notes that the S&P 500 reached a record high during the same week, a development praised by President Trump as a boon to investors and corporate America. No concrete wage-growth figures or inflation rates were supplied in the Treasury’s response.

New York Times

• “I got sick of hearing about this K-shaped economy,” — Mr. Bessent, treasury secretary — Mr. Bessent, treasury secretary

New York Times