The Federal Reserve is once again in a tough spot, as inflation remains high. As officials weigh the risks of doing too much or too little with interest rates, one generation is complicating things: baby boomers.
In Arizona, Susan Curtis is living her golden years in a golden era for people her age. Her year looks busy. Looking at cruises in a Phoenix travel agency, she explains she's "currently planning Spain and then Antarctica in November."
Jim Bogues is waiting to retire but is already reaping the fruits of his labor and his boomer generation.
"We have very little debt and we do have savings put aside, and a good income," he says.
Nancy Melton, the manager of Preferred Travel Services in Phoenix, says business is booming.
"We have a lot of boomer clients," she said. "They're booking longer trips because they have the luxury of time and they do have the disposable income."
Boomers like Bogues and Curtis are fueling a sustained boost in the U.S. economy.
The Federal Reserve reports that three-quarters of all household wealth is owned by people over 55. That's up from 68% in 2010; and they accounted for 22% of consumer spending in 2022, the highest on record. They're enjoying the fruits of a booming stock market and increasing home values.
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Analysts say baby boomers are among the richest retiring generations ever.
"I would agree with that for sure," says Bogues. "Baby boomers. They have the dough."
With inflation at a sticky 3.5%, the Fed is struggling to get spending under control to meet the 2% inflation goal. This week the Fed is reconsidering interest rates. Top economists think the rates will hold, rather than cut as was anticipated earlier this year.
Curtis says her 26-year-old son lives at home. Bogues' son is now off to college.
Both parents acknowledge times have changed.
"A lot of students come out of college with debt. And then, with the rising interest rates right now, whether it be on mortgages or if they need a vehicle — it's really unaffordable," said Bogues.
Boomers say they've worked hard and now it's time to relax.
"The boomers have the money, so they're spending the money," says Bogues. "They're living their lives."
"The freedom is wonderful," adds Curtis.
