The gap between Main Street and Wall Street is widening

Main Streeters are sanguine. The money men are sounding alarms.

The gloomiest voices at Semafor World Economy in Washington, DC, last week belonged to the financiers. Citadel Securities President Jim Esposito, whose firm facilitates one in four US stock trades, warned of a “breakdown in discipline.” His diagnosis: “We’ve raised a generation of investors that really never learned the price of being wrong.” They bought the dip, and were either rewarded for their pluck or bailed out when bets went wrong.

That learned dependency traces back to the Greenspan Put of the 1990s, and it’s now threatening to “tip over into irrational complacency,” in the words of London Stock Exchange Group CEO David Schwimmer. The worry: Investors are treating this economic moment — physical supply disruptions, geopolitical fracturing, tariff whiplash — like the liquidity crises of the past, which were solvable with enough government cash. This one might not be.

The photo-negative of complacency is, of course, resilience. CEOs in the real economy — manufacturing, consumer goods, the stuff you can drop on your foot — remain as bullish as ever. Corporate profits are at record highs. Americans are still, historically speaking, fully employed. And global fracturing, for all its chaos, favors the US.

Hyundai CEO José Muñoz, reopening a Georgia plant hamstrung last year by a botched ICE raid, listed his top three priorities: “U, S, A.” Despite all the economic shocks hurtling their way, CEOs feel big and battle-tested enough to absorb most anything.

Usually the gap between Wall Street and Main Street cuts in one direction: Financiers party while those tethered to corporate investment and consumer spending worry. When that happens, it’s easy to dismiss Wall Streeters as bacchanalian doofuses or, worse, leeches.

But when the gap goes the other way, it’s worth paying attention to. It could be a leading indicator that this crisis is taking longer to filter through to the real economy than we think.