Top 1% Hold $60.3 Trillion, Bottom 50% Just $4.3 Trillion: Market Commentator Says 'the Middle Class Is Gone'
The top 1% of Americans now control one-third of all U.S. net worth as inflation erodes purchasing power and the Federal Reserve’s first rate hike since 2023 pushes borrowing costs higher.
Top 1% Hold $60.3 Trillion, Bottom 50% Hold $4.3 Trillion
The top 1% of U.S. households hold $60.3 trillion, a record 32.5% share of net worth, according to The Kobeissi Letter, citing Federal Reserve data.
Meanwhile, the bottom 50% hold $4.3 trillion, with the richest holding 14 times as much.
The top 10% control 70% of the $185 trillion in total household net worth, which is up from $101 trillion during the pandemic.
“The middle class is gone,” the market commentator said in a post on X.
Inflation Erodes Purchasing Power for Non-Asset Owners
Kobeissi pointed to the more than $4 trillion in stimulus the U.S. began handing out in 2020, which it had warned would amount to the “largest involuntary tax in US history,” collected through inflation.
CPI has run above the Fed’s 2% target for 60 straight months, something last seen in the 1980s, and the dollar has lost about 23% of its purchasing power since 2020.
Inflation “disproportionately erodes purchasing power in non-asset owners,” it added.
The bottom 50% hold just 4% of their net worth in stocks and mutual funds, compared with nearly 60% for the top 0.1%.
The personal consumption expenditures price index came at 3.4% in August, with core at 3.0%, according to the Bureau of Economic Analysis.
Energy was the biggest source of price pressure, up 2.3% on the month.
Fed Hike Adds to Borrowing Costs
The Fed raised rates by 25 basis points in September to a target range of 3.75%-4.00%, its first hike since July 2023.
A WalletHub analysis estimated the move could cost credit card users about $2 billion in interest over the next 12 months, and LendingTree’s Matt Schulz told CNBC last month that cardholders should expect their APRs to rise by a quarter point over the next couple of months.
Kobeissi warned that the wealth gap will only widen as artificial intelligence accelerates and inflation rises, and added that “own assets or be left behind.”
Disclaimer: This content was produced with the help of AI tools and was reviewed and published by Benzinga editors.
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