🟥 Federal Reserve Chair Jerome Powell indicated that the central bank hears a lot from its partners in the markets and companies about the phenomenon of "K-shaped economy".. What does that mean?
▪️ This term reflects a sharp economic division among social classes, which poses additional challenges for U.S. monetary policy.
▪️ The upward line "the upper part of the K" refers to high-income households, investors, and large companies that continue to spend and invest, thereby boosting growth in technology and luxury service sectors.
▪️ The downward line "the lower part of the K" refers to low-income households, small and medium-sized enterprises, and unstable employment, which face increasing financial pressures, declining purchasing power, and layoffs.
▪️ Powell states that reports from large companies and earnings calls reveal a "dual-track economy."
▪️ Powell added that this division makes the Fed's task more complicated, as lowering interest rates may help the affected groups but could increase inflation risks, while keeping rates high puts more pressure on households and small businesses$BTC
