America
Top 10% of earners drive US consumption as wealth gap challenges Trump’s economic narrative
The economy of US President Donald Trump exceeded expectations in his first year back in office, but this situation applies primarily to America’s wealthiest households.
According to the Royal Bank of Canada, the top 10% income bracket in the US spent $20.3 trillion in the first half of 2025, a figure nearly equal to the $22.5 trillion spent by everyone else.
This spending was triggered by a buoyant stock market, high real estate prices, and solid wage increases for the wealthy. Bank of America notes that the net salaries of the highest account holders increased by 4% last year, while income growth for poorer households was only 1.4%.
This spending power has kept the Trump economy vibrant. The Department of Commerce reported on Tuesday that the US grew at an eye-catching rate of 4.3% in the third quarter, thanks to an increase in personal consumption. The President described this as the “Trump Economic Golden Age in full gear.”
However, these strong figures hide the extent to which the wealthy are driving growth. While business leaders from Manhattan to South Florida look optimistically toward the future, this view is not shared by most voters.
In polls, a majority of Americans say they are struggling under the pressure of rising living costs and a weakening labor market. The Federal Reserve Bank of Boston states that credit card debts of low-income consumers have increased “significantly” compared to the pre-pandemic period.
While growth and asset prices rise, Trump’s approval ratings are falling. For some allies, this situation is surprising.
Economist Stephen Moore, a former Trump advisor, claims, “All the talk about the cost of living surprises me. I don’t fully understand it because the economy is truly very strong right now. If the trend of the last six months continues, it will become increasingly difficult for Democrats to maintain their narrative that the economy is not doing well.”
Undoubtedly, most of the traditional characteristics of a generally healthy economy are present. Business is going very well for Wall Street banks and law firms, and investors are pouring hundreds of billions of dollars into risky artificial intelligence ventures that are creating a new generation of billionaires. According to one estimate, merger and acquisition activity will reach $2.3 trillion in 2025; this represents a 49% increase over last year’s figure, and the benefits of this increase are flowing disproportionately to high-net-worth investors.
Corporate profits showed an increase of over $166 billion in the third quarter, following a reported $6.8 billion increase in the previous three months.
Luxury hotels, Swiss watches, and premium credit cards continue to see strong demand despite negative signals from consumer surveys.
Richard Ramsden, a managing director and partner at Goldman Sachs who oversees the large-bank investment research unit, told reporters earlier this month that leaders of banks and asset management companies believe the US has a solid foundation and argued that the narrative regarding a K-shaped economy—meaning the financial situation of the rich improves while that of the poor worsens—is “not supported by the data.”
While wealthy consumers spend more, BofA’s data revealed that spending growth for low-income households has remained positive.
Separately, S&P Global analysts expect consumer spending to moderate next year, while also noting that US households have balance sheets that have been “strong for decades.”
Government officials are confident that the atmosphere will improve if the president’s tax policies lead to more jobs and higher net salaries.
Furthermore, it is hoped that measures such as the creation of Trump-branded investment accounts for newborns and the expansion of investment offerings for retirement plans will ensure that working-class Americans benefit more from Wall Street’s rise.
Steve Bannon, who served as chief strategist during Trump’s first term, said the president must “constantly emphasize” how the economy is growing and that higher wages will stem from the supply-side tax cuts in the law titled the Great Wonder Act, which was passed in July.
“Strong economic growth, more and better jobs, raises: this is what MAGA voted for, and this is what they expect,” Bannon said in an interview.
If the economy continues its current trajectory, this message may be in vain.
Analysts warn that consumer spending could weaken if employment remains slow and unemployment, which rose to 4.6% last month, continues to increase.
The JPMorganChase Institute found that income growth has been weak this year, especially for older workers, and that the balances of bank account holders have remained flat.
The American Financial Services Association, representing consumer credit companies, warned earlier this month that lenders are preparing for a deterioration in credit performance as subprime borrowers show signs of stress.
At the Yale CEO Conference held in Manhattan last week, Federal Reserve Governor Christopher Waller, one of the finalists for the next presidency of the Central Bank, explained how the financial precipice has accelerated since the spring months.
“Wages are not changing. Surpluses have disappeared. Bank accounts have become closer to living paycheck to paycheck,” Waller, a former St. Louis Fed economist, told corporate executives gathered at the Ziegfeld Ballroom.
Despite this, Trump officials were encouraged by recent data showing a meaningful wage increase for non-supervisory employees last year. Although sentiment lags behind, stronger-than-expected holiday season retail sales and solid sales growth from major retailers show that Americans are still spending healthily.
Joseph Lavorgna, an advisor to Treasury Secretary Scott Bessent, said that if inflation continues to fall, real wage growth will also accelerate.
“To me, this is a recipe for a more broad-based and resilient economy that does not focus on the high-income group,” Lavorgna said.
America
US Senate panel seeks records in Trump-linked crypto investigation
Richard Blumenthal, the ranking Democrat on the US Senate Permanent Subcommittee on Investigations (PSI), has requested documents from cryptocurrency exchange Binance, Tether, and crypto projects linked to President Donald Trump as part of inquiries into potential financial irregularities and conflicts of interest.
The documents were requested to be submitted by 4 January 2027.
Senators warned that they would resort to compulsory measures if the request was refused.
Entities sent document requests include World Liberty Financial and Fight Fight Fight LLC, both linked to President Trump’s family.
Blumenthal began examining the activities of these entities in May 2025 following reports that they may have engaged in transactions with foreigners under federal criminal investigation, attracted investments from foreign governments, and violated public ethics rules.
Notably, in 2026, it emerged that individuals close to the Abu Dhabi royal family had signed an agreement with the Trump family to purchase 49% of the shares in World Liberty Financial for $500 million.
The company, founded in September 2024 by the US President and his sons, launched a token called WLFI.
According to official disclosures, Trump made $800 million from this token alone.
Conversely, crypto analytics firm Nansen calculated, by tracking 1.48 million crypto wallets, that approximately two-thirds of those who invested in the token after its launch in January 2025 incurred losses.
While many retail investors spent several thousand dollars on purchases, the largest investors poured in millions of dollars.
Trump also launched his own memecoin, TRUMP, on 17 January 2025, prior to his inauguration.
Rising 10.6-fold in value within three days, the cryptocurrency’s market capitalisation reached $15 billion at its peak.
However, after those three days, the price entered a downturn, plunging by 97%.
Trump reported in his financial disclosure that he earned $635 million in income from sales of these memecoins.
In July 2026, Blumenthal held public hearings on the family crypto projects from which the President made $1.4 billion.
The losses suffered by TRUMP memecoin investors were also addressed during these hearings.
Cryptocurrency exchange Binance and Tether, which issues the largest stablecoin, USDT, are under scrutiny over their dealings with the Trump administration.
Lawmakers suspected conflicts of interest stemming from the exchange’s collaboration with World Liberty Financial.
Previously, a group of senators had demanded an inquiry into the terms of the presidential pardon granted to Binance founder Changpeng Zhao.
Separately, The New York Times reported that the United Arab Emirates (UAE) gaining access to American artificial intelligence chips coincided with a $2 billion investment by a UAE entity into Binance using USD1, a stablecoin issued by World Liberty Financial.
While this deal rapidly expanded the volume of tokens in circulation, it enabled Trump’s company to generate revenue from interest on government bonds where USD1 reserves were held.
Trump, for his part, described the report as slander.
America
US credit card debt hits record $1.29 trillion, New York Fed reports
Americans’ credit card debt reached a record $1.29 trillion in the third quarter, according to a new report published by the New York Fed.
Falling behind on credit card payments can trap struggling households in a cycle of fees, credit score downgrades, and increasingly expensive borrowing.
Although delinquency rates across the country have shown improvement, the latest figures indicate that financial distress is concentrated in lower-income communities.
Consumer credit card balances rose by $22 billion in the third quarter, representing an increase of 1.7%. This figure is $52 billion higher than it was a year earlier.
The figures are not adjusted for inflation, which may mean that part of the increase reflects rising prices rather than more borrowing in real terms.
Total household debt, which includes mortgages, student loans, and auto loans, rose by $334 billion in the third quarter to reach a record $19.1 trillion.
This total represents an increase of $5 trillion compared to 2019, just before the pandemic.
The volume of credit card balances falling into serious delinquency is declining, indicating some improvement in Americans’ ability to make their payments on time.
The rate of credit card debt transitioning into serious delinquency fell to 6.9% in the third quarter. However, this rate remains distinctly higher than the 5.2% recorded prior to the pandemic.
Americans living in lower-income neighbourhoods are facing greater difficulty in keeping up with their credit card payments compared to more affluent groups, according to a separate report published by the New York Fed on Tuesday.
Delinquency rates across all neighbourhood income tiers remain above pre-pandemic levels, while the gap between the wealthiest and poorest areas has widened since 2022.
In the lowest-income neighbourhoods, 10.3% of credit card balances transitioned into serious delinquency over the past year.
This is more than double the 4.4% rate observed in the wealthiest neighbourhoods.
The average credit card balance per borrower now stands at $6,678, according to TransUnion’s third-quarter analysis report.
Among borrowers under the age of 30, the rate of credit card debt falling at least 90 days delinquent reached the highest level, according to the Fed’s report.
Democrats won the midterm elections promising to bring down prices, but delivering relief that voters can genuinely feel in their household budgets will be a difficult target to achieve.
America
Mamdani quietly asks Trump to release detained immigrants
New York City Mayor Zohran Mamdani is using his rapport with US President Donald Trump to secure the release of selected detained immigrants.
According to reporting by Politico, Mamdani persuaded Trump during their second White House meeting in February to free a university student who had been detained that day by ICE.
The outcome served as validation for Mamdani, who pointed to the release of the Columbia University senior as proof that his surprisingly cordial relationship with Trump could produce tangible results for New Yorkers.
Mamdani subsequently continued to seek similar immigration-related interventions from the Republican president.
Since that February meeting, Mamdani and his aides have quietly forwarded the names of approximately two dozen immigrant New Yorkers held in ICE custody to Trump’s team, asking the president to order their release.
Two sources familiar with the matter said Mamdani most recently shared names of detained immigrants during a September meeting with Trump at Gracie Mansion.
The sources said the individuals in question had no serious criminal records, though they declined to disclose their identities, citing safety concerns.
According to Politico, these ongoing efforts regarding detained immigrants indicate Mamdani’s belief that he can leverage his rapport with Trump to advance causes the mercurial president might not ordinarily support.
Mamdani’s decision not to disclose these continued appeals publicly suggests an inclination to keep his interventions private to improve their chances of success.
Yet it remains unclear whether any immigrant besides Columbia University student Elmina Aghayeva has actually been released as a result of these efforts, and concern is mounting within City Hall that the window for securing such releases may be closing.
Mamdani’s aides working on the releases, including his Chief of Staff Elle Bisgaard-Church, communicated primarily with Trump’s White House Chief of Staff Susie Wiles, according to people familiar with the matter.
Last week, Trump replaced Wiles with Stephen Miller, the architect of the administration’s most hardline immigration proposals and one of the loudest internal voices urging the president to pursue a mass deportation agenda in his second term.
A person familiar with the Mamdani administration’s thinking said the mayor’s team views it as unlikely that Miller will continue cooperating in the manner Wiles did, given his stance on immigration.
Mamdani spokesperson Dora Pekec declined to comment on internal concerns regarding Miller and did not provide details about the immigrants whose release the mayor had requested.
Pekec noted, however, that Mamdani has “consistently advocated directly on behalf of New Yorkers in his calls and meetings with the president.”
Murad Awawdeh, a close Mamdani ally and president and CEO of the New York Immigration Coalition, said the mayor’s team should not halt engagement with the Trump administration on immigration matters because of Miller’s promotion:
“Stephen Miller is a cruel individual who has spent his career attacking immigrants, but he is not the president; Donald Trump is, and this is his deportation agenda. New York expects the president to work with the mayor to serve this city and end the terror in our communities. Miller’s promotion changes none of that.”
Mamdani’s warm dynamic with Trump has confounded both allies and critics.
During last year’s New York mayoral election, Trump referred to Mamdani as a “communist lunatic” and threatened to have him arrested.
In turn, the 35-year-old democratic socialist branded the president a “fascist” and pledged to fight him relentlessly if elected mayor.
Yet that animosity fell away late last year during their first White House meeting, where an amicable tone prevailed.
The thaw culminated in September at Gracie Mansion, where Trump said Mamdani had “great potential” to be a “terrific mayor.”
Mamdani returned the compliment by noting that the president had “built quite a bit of housing in our city.”
Despite the polite exchange, questions remain over how much substantive progress Mamdani can genuinely secure through Trump, including on immigration.
To date, Aghayeva’s release stands as one of the few concrete concessions Mamdani has obtained from Trump.
Aides on both sides are also discussing a multi-billion-dollar federally backed housing initiative in Queens, and last month Mamdani used his channel to Trump to help secure a temporary visa for a Ghanaian woman whose son was shot and killed in the Bronx.
Beyond those instances, few tangible results have emerged, though Trump’s decision not to enact punitive measures against New York is viewed by Mamdani’s allies as a win for the city.
Trump’s political standing is widely seen as weakened following the Republican Party’s loss of both houses of Congress in elections last Tuesday.
How this political shift will affect Trump’s willingness to engage with ideological adversaries such as Mamdani remains uncertain.
Miller’s appointment as chief of staff appears to signal little presidential interest in moderation, particularly on immigration policy.
Even so, the mayor said last week that he does not intend to stop seeking Trump’s assistance, despite “fierce” policy disagreements.
“We have found an area of common interest in the well-being of New York City, and as long as that can deliver for our city, I’m going to keep that door open,” Mamdani told Politico on Friday in Puerto Rico.
Mamdani and other elected officials from New York had gathered in Puerto Rico for the annual Somos political conference.
Two days later, in an interview on Fox News, a network Trump is known to watch regularly, Mamdani described a “productive relationship” with the president, saying the two text and speak by phone frequently:
“Through those conversations, we were able to get a New Yorker out of ICE detention. We were able to secure a visa for a grieving mother who would have otherwise had to watch her son’s funeral from thousands of miles away. What that tells me is: My job is to deliver for New Yorkers, and I have to work with whoever has the power to do that, wherever they may be.”
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