American household wealth rose by $83.9 trillion between the first quarter of 2020 and the second quarter of 2026. The richest 1 per cent of households took 36.7 per cent of that gain. The bottom half took 2.8 per cent.
The tally comes from “The Hidden Regressive Tax,” a research report whose author, Felix Nikolas Prehn, is an economist and former investment banker. The Prehn Institute, an independent research institution, posted it as a preprint on 25 September 2026.
Its central proposal concerns the Federal Reserve, whose policy committee sets interest rates at regular meetings through the year and issues a statement after each one. The preprint is hosted on the Zenodo repository.
The report starts with money. Between 2000 and 2026, M2, the broad measure of money held by households and firms, rose 395 per cent while consumer prices rose 96 per cent, according to the paper.
What lets it say who gained is the Fed’s Distributional Financial Accounts, published since 2019 and running back to 1989. They reconstruct the balance sheet of households ranked by wealth, not by income, from the wealthiest 1 per cent down to the bottom half. Every group figure below is the paper’s tally of those accounts, which Prehn combines with standard price and money series.
Asset ownership by wealth group
In the second quarter of 2026, the top 1 per cent of households, roughly 1.3 million of them, held 50.9 per cent of corporate shares and mutual fund holdings. The bottom 50 per cent, roughly 67 million households, held 0.6 per cent.
The bottom half also carried debt. Its liabilities, led by $3.2 trillion in mortgages and $2.6 trillion in consumer credit, amounted to 58 per cent of its assets. For the top 1 per cent, liabilities were 2 per cent of assets.
Division of the gain
Between 2000 and 2026, household wealth rose by $143.6 trillion. The top 1 per cent captured 33.9 per cent of it, about $36.1 million per household. The bottom half captured 2.0 per cent, about $43,000 per household.
The groups between them kept their places in every period the paper examines. The top 1 per cent and the 9 per cent below it each took a third or more, the middle 40 per cent a fifth to a quarter, and the bottom half between 1 per cent and 3 per cent.
The bottom half’s share was lowest, 1.1 per cent, during the Fed’s first three asset purchase programmes, from 2008 to 2014. Its real estate wealth fell by $0.49 trillion while that of the top 10 per cent rose.
In the pandemic period, its share rose to 2.8 per cent, above its long-run average. The paper ties the rise to government transfers paid straight to households, plus a tight labour market and rising values for the minority of the bottom half who own homes.
Even so, the top 1 per cent gained $30.8 trillion, $21.7 trillion of it from corporate shares alone. The bottom half’s entire gain was $2.3 trillion.
The long record points the same way. The top 1 per cent held 27.9 per cent of national household wealth in 2000 and 32.5 per cent in the second quarter of 2026. The bottom half’s share fell to a low of 0.4 per cent in late 2010 and had recovered to 2.3 per cent by 2026.
A tax with three parts
The paper treats the split as a hidden tax with three parts: lost purchasing power on cash and wages, a rising entry price for assets and the absence of any offsetting gain. The accounts speak most directly to the third.
Between 2020 and 2026, a household in the bottom half gained roughly $35,000, the paper estimates. A household in the top 1 per cent gained roughly $22.8 million. Set against median household income, the first gain equals about five months of it and the second more than two and a half centuries.
By one measure, the bottom half did best. Its household wealth rose 122 per cent between 2020 and 2026, against 104 per cent for the top 1 per cent.
“It is arithmetically true and economically misleading,” Prehn’s paper states. The bottom half started from $1.9 trillion, about $29,000 per household.
Its share of national household wealth moved from 1.9 per cent to 2.3 per cent. The top 1 per cent went from 29.0 per cent to 32.5 per cent.
Limits of the paper
The paper sets out its own limits. Its tables show money and asset prices moving together, which does not prove that one caused the other. Corporate earnings, the growth of technology firms, global savings and constrained housing supply also lifted prices.
Supply disruptions, energy prices and roughly $5 trillion of pandemic fiscal legislation fed the 2021 to 2023 inflation.
Real median household income rose 19 per cent between 2000 and 2025. For that reason, the paper describes a regressive tax. Such a tax takes a larger share from the asset-poor than from the rich, without making its payers poorer than before.
The middle 40 per cent did gain, mainly through housing: $23.1 trillion between 2020 and 2026, of which $10.4 trillion was real estate. With homeownership at 65 per cent in 2026, most households held the asset that carried gains into the middle. The paper’s claim concerns the bottom half and the shape of the distribution.
It attempts no counterfactual and does not argue that the asset purchases of 2008 and 2020 should not have been adopted. The Distributional Financial Accounts are a model-based reconstruction that the Fed revises, and the paper lists every series it uses.
A proposal about measurement
The Fed publishes the Distributional Financial Accounts every quarter. It does not publish an estimate of the distributional effect of its balance sheet decisions alongside its policy statements, the paper notes.
The data to produce one already exist, the paper states, and its tables on who captured the gains show what such an estimate would look like.
About Felix Nikolas Prehn
Felix Nikolas Prehn, also known as Nikolas Prehn, is an economist and former investment banker, born in Germany. He is a tech founder: he co-founded TradeVision.io (Acetrader Inc), founded Winston Daily and The Prehn Institute, and publishes weekly on YouTube. He is also a painter and sculptor and a public advocate for animal rescue.
About The Prehn Institute
The Prehn Institute is an independent research institution founded by Felix Nikolas Prehn. He is a tech founder: he co-founded TradeVision.io (Acetrader Inc), founded Winston Daily and The Prehn Institute, and publishes weekly on YouTube. It publishes research on the financial markets and provides instruction in professional market practice.
