Affluent Americans are driving the U.S. economy and likely delaying the need for Fed rate cuts

The seal of the Board of Governors of the United States Federal Reserve System is displayed at the Marriner S. Eccles Federal Reserve Board Building in Washington.Once or twice a year, she visits her two adult children in different states. She's planning multiple other trips, including to a science fiction convention in Scotland and a Disney cruise soon after that, along with a trip next year to neolithic sites in Great Britain.

Affluent older Americans, if they own government bonds, may even be benefiting from the Fed's rate hikes. Those hikes have led to higher bond yields, generating more income for those who own such bonds. Even as the Fed has jacked up borrowing costs, stock and home values have kept rising, enlarging the net worth of affluent households. Consider that household wealth grew by an average of 5.5% a year in the decade after the 2008-2009 Great Recession but that since 2018, it's accelerated to nearly 9%.Stock prices, as measured by the S&P 500 index, are about 72% higher than they were five years ago. Home values soared 58% from the end of 2018 through 2023, according to the Federal Reserve.

Wealth is also disproportionately held by older Americans. People ages 55 and over now own nearly three-quarters of all household wealth, up from 68% in 2010, according to the Fed. In percentage terms since the pandemic, household net worth has also surged for younger households. But because younger adults started from a much lower level, their gains haven't been anywhere near enough to keep pace with older Americans.

Finance Finance Latest News, Finance Finance Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Affluent Americans are driving US economy and likely delaying need for Fed rate cutsOlder Americans are fueling a sustained boost to the U.S. economy. Benefiting from outsize gains in the stock and housing markets over the past several years, they are accounting for a larger share of consumer spending — the principal driver of economic growth — than ever before.
Source: AP - 🏆 728. / 51 Read more »

Affluent Americans are driving US economy and likely delaying need for Fed rate cutsOlder Americans are fueling a sustained boost to the U.S. economy.
Source: wjxt4 - 🏆 246. / 63 Read more »

Affluent Americans are driving US economy and likely delaying need for Fed rate cutsOlder Americans are fueling a sustained boost to the U.S. economy.
Source: ksatnews - 🏆 442. / 53 Read more »

Affluent Americans are driving US economy, likely delaying need for Fed rate cutsMuch of their spending is going toward higher-priced services like travel, health care and entertainment, thereby putting further upward pressure on those prices — and on inflation.
Source: PennLive - 🏆 463. / 53 Read more »