Economic Dividing Lines: Navigating the Bifurcated US Economy

Nancy Lazar, Piper Sandler’s chief global economist, has recently spoken to Fox Business Network about the unique economic situation the US finds itself in. She referred to the current economic state as a “bifurcated” economy, something that has only occurred twice before and both times ended in a recession. According to Lazar, there are those who are profiting from higher interest rates and those who are suffering, with some able to afford the increased prices and some being financially squeezed.

Lazar emphasized the need for higher interest rates to eventually lead to a recession, which would help address issues like excesses and inflation. Despite the potential for a recession, Lazar stated that it could be necessary to address the inflation problem. She worries more about persistent inflation than a recession and highlights the fine line that the economy is currently walking. Without taking action, there is a risk that companies and individuals will continue to bid up prices, leading to further challenges in the economy.

Large corporations have seen significant gains from high interest income, favorable financial conditions, stock market rallies, and government assistance. On the other hand, consumers are struggling with mounting debts, high interest rates, and inflation that erode wage increases. While some large corporations may benefit from a recession due to reduced competition or improved bargaining power with suppliers or customers