**Title: US Treasury Secretary Claims Economic Divide is Narrowing Amidst Inflation Concerns**
US Treasury Secretary Scott Bessent has asserted that the economic gap between wealthier and lower-income Americans is closing, despite ongoing inflation and rising living costs. In a recent interview with CNBC, Bessent rejected the characterization of the US economy as a “K-shaped economy,” a term used to describe a situation where wealthier households thrive while lower-income groups struggle.
“I got sick of hearing about this K-shaped economy,” Bessent stated, asserting that the narrative is outdated. He introduced the concept of a “C-shaped economy,” suggesting that lower-paid workers are beginning to see improvements in their financial situations. He noted that the bottom 25% of wage earners have experienced a 2% real wage increase, drawing a comparison to wage growth trends during the first term of former President Donald Trump.
Bessent's comments come at a critical time, just ahead of the November midterm elections, as inflation remains a pressing concern for many Americans. The Federal Reserve’s preferred inflation measure continues to exceed its long-term target of 2%. Rising energy costs, exacerbated by geopolitical tensions such as the US-Israeli conflict with Iran, alongside the impact of Trump’s global tariffs, have contributed to the strain on consumer prices. A recent poll from Marquette University Law School indicated that inflation and the cost of living are the top concerns for 35% of respondents.
Former President Trump has pointed to the stock market's performance as a sign of economic strength, claiming that record highs have been reached since his return to office. He highlighted that the average American 401(k) retirement account has seen gains exceeding $30,000. However, economists caution that rising stock prices do not necessarily reflect the financial realities for most Americans, as stock ownership is predominantly concentrated among wealthier households.
Moody’s Analytics has revealed that households earning over $200,000 accounted for nearly 60% of consumer spending in the first quarter of 2026, with their expenditures continuing to outpace inflation. In contrast, inflation-adjusted spending among the remaining 80% of earners has remained largely stagnant.
Recent data on wage growth presents a mixed picture. The Federal Reserve Bank of Atlanta’s Wage Growth Tracker indicates that while wage growth has been positive this year, it does not show that earnings for the lowest-paid workers have surpassed those of higher-income earners.
Bessent also referenced tax measures included in Trump’s proposed ‘One Big Beautiful Bill Act,’ which includes tax breaks on certain tips and overtime earnings, deductions for specific auto loan interest, and reduced taxes for some retirees. He argued that these measures would increasingly benefit American households over time. However, the Tax Policy Center estimates that approximately 60% of the tax benefits from the proposal would go to households earning around $217,000 or more annually, suggesting that the majority of the relief would favor higher-income Americans.
As the economic landscape continues to evolve, the focus remains on how these developments will impact various income groups in the United States, particularly in light of persistent inflation and rising living costs.