Bank of America Calls It 'The Great Convergence': Rich-Poor Spending Gap Narrows Further, Not Everyone's Buying It

Bank of America's data on the rich-poor spending gap, first flagged as narrowing in guidance published earlier this month, has now hardened into something the bank's economists are calling a 'great convergence.'

Aditya Bhave, head of U.S. economics for BofA Global Research, and David Tinsley, senior economist at the Bank of America Institute, laid out the case in a webinar covered by Yahoo Finance. For roughly 12 to 18 months, BofA's internal card data showed high-income households spending 1 to 2 percentage points faster than middle- and lower-income households every month. That gap has now closed. Spending growth across lower-, middle-, and higher-income households is running at roughly the same rate, converging near 5% year-over-year, including in discretionary categories.

"There has been a closing of the K in this data," Tinsley said, according to Yahoo Finance.

Even BofA isn't calling the K-shaped economy dead. The top 5% of earners are still an exception, with spending growth running about 1.5 percentage points faster than everyone else, driven by stock-market wealth effects, according to the bank's own presentation. So the gap has narrowed broadly, but the very top is still pulling away from the middle and bottom.

CNN's reporting adds a second data source: PNC. A June report from PNC researchers found the difference in spending growth between higher- and lower-income Americans is the narrowest it's been in three years. PNC also said there's early evidence the savings gap between upper- and lower-income households is starting to narrow too.

CNN also cites Bank of America Institute data showing lower-income Americans' spending growth outpaced high-income Americans' in June, and that the gap in discretionary spending growth hit its narrowest point since July 2025. Earnings growth showed basically no difference between rich and poor last month, per Bank of America.

Joe Brusuelas, chief economist at RSM US, told CNN this fits a longer trend: the K has actually been narrowing since 2019, as lower-income pay caught up with inflation, boosted by pandemic-era stimulus and safety-net spending. Over the past seven years, the poorest Americans' net worth grew faster than the upper middle class's, and middle-class wealth grew faster than the top 1%'s, according to CNN's reporting.

Possible explanations floated in the reporting include larger tax refunds tied to the One Big Beautiful Bill Act, consumer spending tied to the World Cup, and a stable job market with bigger raises for people who switch jobs, according to Yahoo Finance and CNN.

Rick Newman, writing in The Pinpoint Press, pushed back hard on the celebratory framing. He noted that Treasury Secretary Scott Bessent has gone further than the bank's own economists, declaring the K-shaped economy "over," which Newman frames as a politically convenient talking point at a moment when the administration could use good economic news. Newman's skepticism deserves a fair hearing: a few months of converging spending data, built partly on one-time tax refunds and a World Cup spending bump, is not the same as a structural reversal of a wealth gap that's been building for decades. Spending convergence also isn't the same as wealth convergence. The top 5%'s asset gains from a strong stock market don't show up in a monthly card-spending number the same way.

BofA's own data shows the top 5% still growing spending 1.5 points faster than everyone else, which cuts against a clean narrative of the K genuinely closing. A stagnant or reversing trend in one or two categories of a large, noisy economy doesn't necessarily undo the underlying asset-ownership gap that separates households with large stock portfolios from those without.

Nobody in this reporting disputes the numbers themselves. PNC and Bank of America Institute, working from separate credit and debit card datasets, both show a narrowing in the last few months. The dispute is over whether that's a durable structural shift or a temporary bounce from tax refunds and a stable labor market that could reverse if hiring slows or refund season ends.

The next test comes with Bank of America's and PNC's following monthly reports. If the convergence holds through the fall without the tailwind of tax-refund season, that's a real signal. If lower-income spending growth fades once the extra refund cash is spent, Newman's skepticism will look better than Bessent's declaration that the K-shaped economy is finished.