Positioning portfolios for a closing of the gap in the US’ K-shaped economy

GOING into 2026, the global economic backdrop should be supportive for growth. We are past peak trade uncertainty, while monetary and fiscal policy are broadly supportive.

So far, we have seen a story of divergence, especially in the so-called K-shaped economy in the US. There, we have seen divergence between income groups, sectors and stock market performance.

In 2026, we expect this divergence to narrow. The benign outlook should allow the benefits of US economic expansion to broaden across income groups and sectors, allowing the K-shaped economy to close from the bottom.