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Home / Business and Economy / Fed's Powell: K-Shaped Economy Raises Sustainability Questions

Fed's Powell: K-Shaped Economy Raises Sustainability Questions

11 Dec

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Summary

Fed Chair Powell confirmed a developing 'K-shaped economy' in the U.S.
This economic trend shows wealth disparity between high and low earners.
Powell expressed uncertainty regarding the sustainability of this trend.

Fed's Powell: K-Shaped Economy Raises Sustainability Questions

Federal Reserve Chairman Jerome Powell acknowledged on Wednesday the emergence of a "K-shaped economy" within the United States, a phenomenon characterized by widening wealth disparity. This economic structure sees affluent individuals benefiting from inflated asset values in stocks and property, while those with lower incomes grapple with escalating costs for essential goods like food and energy.

During a press conference, Powell admitted that the "K-shaped economy" is a discernible trend evident in the Fed's data. He shared concerns about its long-term viability, noting that while consumption is predominantly driven by those with greater means, the struggles of lower-income households present a significant challenge.