Rising home and stock prices have been contributing to the U.S. economy by boosting portfolios and savings accounts of older Americans, giving them the confidence to spend more on things like entertainment and travel. Even though mortgage rates are high, they are not deterred from spending because they are not borrowing money to purchase a house.
As the economy strengthens, American households have seen an increase in their assets, creating more disposable income for non-essential items without needing loans from banks. This type of spending is a key factor in why the economy has not slowed down as anticipated. The Federal Reserve is reconsidering its plans due to sticky inflation caused by increased consumer spending on various goods and services. Professor Lonnie Golden noted that as long as people continue to spend on dining out, travel, healthcare, and pharmaceuticals, inflation rates are likely to remain steady.