New York Fed data shows K-shaped economy isn’t over yet—even if Trump’s Treasury Secretary says it is
Data from the Federal Reserve Bank of New York is shedding new light on the current state of the American economy. On Tuesday, the New York Fed issued its Quarterly Report on Household Debt and Credit , and an accompanying blog post on credit card delinquency. The report found while household debt has decreased modestly , all together, Americans owe a staggering $1.26 trillion on their credit…
The Federal Reserve Bank of New York's latest Quarterly Report on Household Debt and Credit reveals that the U.S. economy is still divided, with wealthier individuals thriving while lower-income consumers continue to struggle—a phenomenon known as a "K-shaped economy." Despite a slight decrease in overall household debt, credit card balances have continued to rise, reaching $1.26 trillion in Q2 2026. This imbalance reflects the widening gap between high-income individuals and those with lower incomes.
The report highlights the growing concern over the rising delinquency rates for credit cards and auto loans. While delinquency rates for most products have remained stable over the past two years, credit card delinquencies have skyrocketed. In Q2 2026, credit card balances increased by $21 billion, totaling $1.26 trillion, and the percentage of balances over 90 days past due rose from 7.6% to 12.8%. This trend mirrors the Great Recession, raising concerns about Americans' ability to keep up with their debt payments.
Treasury Secretary Scott Bessent recently claimed that the K-shaped economy had ended, but the New York Fed's data paints a different picture. The agency warns that the disparity between the haves and have-nots remains a pressing issue. While mortgage balances declined by $74 billion in Q2 2026, home equity lines of credit (HELOC) balances rose by $13 billion, reaching $459 billion—a significant increase from the low of $459 billion in Q1 2022.
These findings underscore the ongoing struggles faced by many Americans, despite the overall decrease in household debt figures.
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