Bessent grilled on the claim that ‘K-shaped economy is over’

 Treasury Secretary Scott Bessent testified before Congress on Wednesday for nearly four hours, fielding questions from lawmakers on inflation, the US economy, tariffs, the federal deficit, and the administration's economic policies.

In the moment above, Rep. Ritchie Torres pressed Bessent on comments he made in a recent interview declaring that "the K-shaped economy is over." Torres challenged Bessent on whether the economic divide between higher- and lower-income Americans has truly narrowed, even as households continue to face different financial realities.

00:00Speaker A

On August 4th, during an interview on CNBC's Squawkbox, you said the following quote, I got sick of hearing about this K-shaped economy.

00:07Speaker A

I can say here definitively the K-shaped economy is over.

00:12Speaker A

Then on August 6th, you wrote on X quote, earnings growth for mainstream workers at the 25th earnings percentile was 5.5% year over year in the latest data this quarter.

00:23Speaker A

You site wage growth of 5.5%. Is that inflation adjusted?

00:28Speaker B

That's nominal.

00:29Speaker A

It's nominal. Okay. So the average CPI inflation rate in the second quarter of 2026 was 3.9%.

00:36Speaker A

So when you once you adjust the 5.5% nominal wage growth for 3.9% inflation, you're left with a real wage growth of only about 1.5%.

00:49Speaker A

a fact that you neglected to mention in your post.

00:52Speaker A

Also left unmentioned is the fact that lower-income households depend disproportionately on wages, while higher-income households own a disproportionate share of financial assets.

01:03Speaker A

From mid-January 2025 to mid-September 2026, real wages rose cumulatively by 0.5%. Over the same period of time, the S&P 500 rose cumulatively by over 20% in real terms.

01:16Speaker A

So, Mr. Secretary, how can you possibly declare that the K-shaped economy is over when during President Trump's second term, the assets of Wall Street are booming while the real wages of Main Street have barely gone up?

01:29Speaker B

Well, it's the opposite of President Biden's term because there was Look,

01:34Speaker A

I there was a

01:36Speaker B

No, no, let me finish.

01:37Speaker A

When do when does when Can I ask, what's the statute of limitations on the Joe Biden Blame Game?

01:41Speaker B

The what's what's the statute?

01:43Speaker A

because we're approaching the two-year mark of the Trump administration.

01:45Speaker B

I I was in a car accident as a teenager and my back still hurts.

01:47Speaker A

Did Did did Joe Biden wage the war in Iran? Did he disrupt the straight of Hormuz? Did he shut down 1/5th of the world's oil supply and LNG exports? Like when in doubt, blame Joe Biden, is that the modus operandi of this administration?

https://finance.yahoo.com/video/bessent-grilled-claim-k-shaped-175300803.html