Washington DC - Treasury Secretary Scott Bessent dismissed the impact inflation has had on low-income people and said the "K-shaped" economy no longer exists in the US.

"I got sick of hearing about this K-shaped economy," Bessent said during an interview with CNBC on Tuesday. "I can say here definitively: The K-shaped economy is over!"

"We're seeing more of a C economy where the lower end of wage earners are finally calling it back, just like they did in President Trump's first term," he said.

The term "K-shaped economy" is shorthand for an economic situation where the divide between the rich and the poor in a society is rapidly growing, often exacerbated by the impacts of inflation.

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Bessent's claim, that the US is approaching a "C-shaped" economy, implies that the wealth disparity between the rich and the poor is reducing over time.

It is also implies that the US economy is performing well, despite the fact that the cost of living is skyrocketing across the country – particularly fueled by President Donald Trump's tariff policy and his damaging war with Iran.

"We can see that the bottom 25 percent of workers had a 2 percent wage gain," Bessent said. "We think that the American people will be feeling that over time."

He argued that average wage gains in lower income earners are outpacing top earners and will become even better when Trump's tax cuts kick in.

Moody's Analytics begs to differ, however, an analysis revealing that the "K-shaped economy" is strong and healthy because the top 20% of earners make up 60% of spending. Meanwhile, the bottom 80% of earners didn't even meet inflation.

"No wonder most Americans are upset with their financial situations and the broader economy," Mark Zandi, Moody's chief economist, was cited as saying by the New York Times.