A millennial dream, a Fed nightmare

Millennials could help to decide one of the biggest mysteries of the modern U.S. economy: What happens next with interest rates? The Federal Reserve policy setting that neither stokes nor slows the economy has been dropping for decades, weighed down by trends like inequality and population aging. People have been living longer without working correspondingly longer, which means they need to save more to fund long retirements. As they stockpile rather than spend their paychecks, it drives down demand and depresses growth and rates. And that's where millennials come in: America's young workers say they want to retire even earlier than the generations before them. If they begin to save aggressively to achieve that frugal goal, it could exacerbate the rate decline -- making the Fed's job even harder. https://lnkd.in/dksBb2y

Interesting. My plan is not to retire early (<65) because I have the chance to live out my dream of studying the impact of a liberal arts education. Not everyone has that same privilege. This insightful article by Jeanna Smialek should also drum into and acknowledge the saving disparities between White/Non-White #Millennials.

Millennials are blamed for “destroying” all kinds of industries because they don’t spend money on things that older generations think they should. They’re saving. And now *that* is problematic? No wonder so many young people are souring on capitalism—everything they do gets criticized, even if the problems are the result of systems set up by the older generations. #millennials #interestrates #federalreserve

More proof that luxury brands chasing millennials is a big ol’ waste of time. Millennials want to change the world. And apparently to retire early. Each generation balances out the previous one. Gen X is busy spending money, lamenting about the good ol’ days of corner offices and two-martini lunches while millennials will be busy fixing our political system which is exactly how it should be. Gen Z will spend and right the economy after Gen Y crushes it. I’m loving Gen Z.

A young generation of aggressive savers could leave central bankers with less room to cut interest rates. Saving, even if virtuous on an individual level, can cause economic trouble en masse.