The middle class is gone. According to Fed data, the top 1% of...
The Kobeissi Letter@KobeissiLetter
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Oct 04, 2026
~3 min read
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The middle class is gone.
According to Fed data, the top 1% of Americans now control ONE-THIRD of all US net worth.
Since 2020, the top 1% have gained +$30 TRILLION in net worth, while the bottom 50% are worth just $4.3 trillion.
What is happening? Let us explain.
(a thread)
According to Fed data, the top 1% of Americans now control ONE-THIRD of all US net worth.
Since 2020, the top 1% have gained +$30 TRILLION in net worth, while the bottom 50% are worth just $4.3 trillion.
What is happening? Let us explain.
(a thread)
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First, it is important to consider the scope of the numbers that we will discuss in this thread.
For perspective, in 2009, total US household net worth fell to $55 trillion.
During the 2020 pandemic, it was $101 trillion.
Today, total net worth is at a whopping $185 trillion.
For perspective, in 2009, total US household net worth fell to $55 trillion.
During the 2020 pandemic, it was $101 trillion.
Today, total net worth is at a whopping $185 trillion.
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In other words, total US household net worth is up +$84 trillion since Q1 2020.
That's up +83% in just ~6 years, which seems like a great outcome at first glance.
But, when you consider the distribution of this wealth and the loss of purchasing power, the picture changes.
That's up +83% in just ~6 years, which seems like a great outcome at first glance.
But, when you consider the distribution of this wealth and the loss of purchasing power, the picture changes.
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For example, while the top 1% of US households are worth $60.3 trillion, the bottom 50% are worth $4.3 trillion.
In other words, the top 1% now holds +$59 TRILLION more wealth than the bottom 50%.
Since 2020, the top 1%'s share has risen ~4 percentage points to a record 32.5%.
In other words, the top 1% now holds +$59 TRILLION more wealth than the bottom 50%.
Since 2020, the top 1%'s share has risen ~4 percentage points to a record 32.5%.
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There are now 134.8 million US households.
This means that the top 1%, or ~1.4 million households, control 14.3 TIMES more wealth than the bottom 50%, or ~67.4 million households.
Factor in the top 10% and the numbers are even more polarized.
This is a historic wealth divide.
This means that the top 1%, or ~1.4 million households, control 14.3 TIMES more wealth than the bottom 50%, or ~67.4 million households.
Factor in the top 10% and the numbers are even more polarized.
This is a historic wealth divide.
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The top 10% of US households now control a whopping 70% of net worth.
The top 0.1% have seen net worth double since 2019, gaining +$14.5 trillion, worth ~$200 million per household.
The top 10% have seen net worth increase by +$52.7 trillion since the 2020 Pandemic.
The top 0.1% have seen net worth double since 2019, gaining +$14.5 trillion, worth ~$200 million per household.
The top 10% have seen net worth increase by +$52.7 trillion since the 2020 Pandemic.
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So, what's happening?
In 2020, when the US began handing out over $4 trillion in stimulus, we issued many warnings.
We called the US stimulus packages the "largest involuntary tax in US history."
This was not a "traditional tax." It was taxation through inflation.
In 2020, when the US began handing out over $4 trillion in stimulus, we issued many warnings.
We called the US stimulus packages the "largest involuntary tax in US history."
This was not a "traditional tax." It was taxation through inflation.
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Since then, the US has seen CPI inflation above the Fed's 2% target for 60-STRAIGHT months.
The last time this happened was in the 1980s, when mortgage rates at 10%+.
As a result, we have seen a historic loss in purchasing power for the USD, a key driver of the wealth divide.
The last time this happened was in the 1980s, when mortgage rates at 10%+.
As a result, we have seen a historic loss in purchasing power for the USD, a key driver of the wealth divide.
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The US Dollar has lost -23% of its purchasing power since 2020.
In other words, if your assets are up +30% since 2020, you have effectively just broken even in real terms.
Years ago, when we began warning to "own assets or be left behind," this is exactly what we anticipated.
In other words, if your assets are up +30% since 2020, you have effectively just broken even in real terms.
Years ago, when we began warning to "own assets or be left behind," this is exactly what we anticipated.
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The reality is that inflation disproportionately erodes purchasing power in non-asset owners.
Why? Because the denominator of all assets is the USD, which means the nominal "value" of those assets goes up when the US Dollar goes down.
Hard assets are a hedge against inflation.
Why? Because the denominator of all assets is the USD, which means the nominal "value" of those assets goes up when the US Dollar goes down.
Hard assets are a hedge against inflation.
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Now take a look at the distribution of assets.
The top 0.1% of US households hold nearly 60% of their assets in stocks and mutual funds.
The next 9.9% and next 40% hold ~38% and ~13%, respectively.
The bottom 50% hold just 4% of their net worth in stocks and mutual funds.
The top 0.1% of US households hold nearly 60% of their assets in stocks and mutual funds.
The next 9.9% and next 40% hold ~38% and ~13%, respectively.
The bottom 50% hold just 4% of their net worth in stocks and mutual funds.
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In our view, this is only the beginning.
As the AI Revolution accelerates and inflation rises, the wealth divide is only going to get worse.
Not only are non-asset owners not seeing asset appreciation, but they are seeing spending power erosion.
This is a lethal combination.
As the AI Revolution accelerates and inflation rises, the wealth divide is only going to get worse.
Not only are non-asset owners not seeing asset appreciation, but they are seeing spending power erosion.
This is a lethal combination.
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The combination of innovation and inflation have led to historic swings in the market.
Our research aims to anticipate these swings in advance.
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Our research aims to anticipate these swings in advance.
Want to access our premium research?
Subscribe at the link below to access our latest analysis and alerts:
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If you're still not convinced, just look at the bond market.
The 30Y Note Yield is now up to its highest since 2002 amid record deficit spending and inflation.
Once again, own assets or be left behind.
Follow us @KobeissiLetter for real time analysis as this develops.
The 30Y Note Yield is now up to its highest since 2002 amid record deficit spending and inflation.
Once again, own assets or be left behind.
Follow us @KobeissiLetter for real time analysis as this develops.