The ‘K-Shaped Economy’ and Other Myths Bankers Should Ignore in 2026

Today’s economic news is buried in a tremendous amount of statistical and political noise.

Yet financial services firms must work at the center of it all, influencing and being influenced by short- and long-term trends.

So, what factors should bankers actually focus on?

Dr. Lindsey Piegza, chief economist at Stifel, Nicolaus & Co., has spent more than two decades turning economic and societal data into insights for investors. She’ll present a special economics breakout session during The Financial Brand Forum 2026.

In Piegza’s view, there are four key trends to understand. And those trends provide some cause for optimism, according to Piegza.

Key takeaway The U.S. economy remains in a good place, compared to the rest of the world.

“Yes, we have challenges,” says Piegza. “But everything’s relative. When we look at our counterparts abroad, we still have the strongest economy, the largest, most liquid financial markets, and the most entrepreneurial labor force.”

There are disappointments and frustrations, of course, says Piegza. “But I would never bet against the U.S.”

Need to Know:

• Consumers continue to drive the U.S. economy. But banks and credit unions must understand what’s going on in multiple consumer segments.
• The widely discussed “K-shaped” economy is more accurately described as “E-shaped,” according to Piegza.

In an interview, Piegza shared four broad economic issues that financial executives ought to watch.

1. The ‘K-Shaped Economy’ Misses an Important Group

Consumers, in Piegza’s view, remain “the backbone of the economy, and also, I would argue, the backbone of the banking system.”

Here’s why: “Consumers are still out in the marketplace, spending. They’re still putting away dollars in their savings accounts. And they’re still taking out loans to invest in new businesses and taking out new lines of credit.”

But Piegza also says there are nuances.

Take the so-called “K-shaped economy,” a term used to describe the bifurcation among consumers who are doing very well and those who aren’t.

A reality check. “True, consumers are not on an unshakeable footing,” acknowledges Piegza. “They are feeling the pain of higher prices, higher borrowing costs, the resumption of student debt payments. And so we are seeing some consumers pull back. They’re still out in the marketplace spending, but momentum has slowed. They’re doing so at a noticeably reduced pace.”

That said, the change in spending patterns has not been uniform across all households, Piegza says.

People who have benefited from the run-up in housing markets and the stock market have deeper equity to lean into.

On the other hand, consumers who hold fewer assets have largely been bypassed by the rise in household net worth. Many of them are piling on $1 trillion-plus in credit card debt, as well as other unsecured credit.

Three cohorts, not two. So Piegza argues that the economy has three arms rather than two. She adds a middle group: Consumers who have the ability and willingness to take on more debt to maintain their spending levels, borrowing against assets like 401K accounts. In other words, the economy is E-shaped, not K-shaped.

A leading indicator. “401K hardship withdrawals are up by double digits since the start of last year,” Piegza says, with people sacrificing tomorrow for today.