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Treasury Secretary Scott Bessent claims the K-shaped economy is over and has transitioned into a C-shaped model.

Treasury Secretary Scott Bessent stated that the K-shaped economy, which describes a wealth gap where the rich pull ahead while the poor fall behind, has officially ended. He argues that the economy is now C-shaped, characterized by a new convergence of outcomes at both ends of the wealth spectrum. Bessent cited robust wage gains for the lower quartile of full-time workers and moderating housing inflation as evidence of this shift. He also pointed to favorable tax policies, such as the removal of taxes on tips, under the administration's new package. However, data from the Groundwork Collaborative suggests the shift is more limited. Elizabeth Pancotti noted that while lower earners are seeing some gains, the high end of the market remains strong, and the gap is not fully closing. While consumer spending still shows a clear K-shape, with top earners spending more rapidly, the administration's economic indicators suggest a more balanced trajectory for the lower earners.

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