Treasury Secretary Scott Bessent said workers in the bottom 25% of the U.S. income distribution saw wages rise 5.5% over the past year, compared with about 1.5% for the highest quartile, arguing that the pattern often described as a K-shaped economy has given way to broader gains for lower-paid workers. He tied that case to easing inflation, with July headline CPI at 3.4% year over year and 0.1% month over month, while core CPI, which excludes food and energy, slowed to 2.5% annually and rose 0.2% on the month, in line with market forecasts and closer to the Federal Reserve's 2% target. Bessent said the gap between 5.5% wage growth and 2.5% core inflation points to real wage gains for lower earners and supports the case for Federal Reserve rate cuts. But he also acknowledged that headline inflation remains higher and that food and energy costs, which weigh more heavily on lower-income households, are not captured in core CPI. The debate remains contested. Cleveland Fed President Beth Hammack said policy should retain restraint because inflation is still above target, while economist Justin Wolfers has argued that nominal wage figures can overstate progress and that inequality is better understood through capital income and labor's shrinking share of national income.