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Denis Sergienko • 2022-07-22

Millennials Are Guilty of Soaring Inflation, Strategists Say

Millennials Are Guilty of Soaring Inflation, Strategists Say

Investing strategists say that millennials are guilty of soaring inflation. As a major buying force, millennials (people aged from 27 to 42) not geopolitical events are to blame for you paying sky-high prices for practically all the products these days.

What’s more, experts believe that this particular category of consumers has been making the prices escalate across the United States for the last several months. So, the problem is witnessing a continuous nature and it is natural.

What’s Going On?

The US economy has already seen wolverine inflation back in the 1970s. It appeared to be the result of the generation gap replacement with around 44 million silent generation representatives substituted by more than 70 million baby boomers. As the result, the economy faced an extraordinary situation:

  • Too many people.
  • Too much money.
  • Too few goods for consumers to chase.
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Today, buyers will hardly suffer from lacking products. On the other hand, the markets were severely damaged by the post-pandemic surge in demand, the current geopolitical situation, growing energy prices, etc. We actually have millions of millennials who have money. However, they have to postpone their car and home buying after the price index has risen by 9.1% back in June highlighting the biggest inflation in the United States over the last 4 decades.

We have people with enough money to buy products, but they do not want to overpay. Central banks across the globe are making an effort to struggle with inflation. At the same time, inflation gets another boost with the Fed trying to keep the prices under control. These measures may appear to be an additional driver for soaring inflation.

Is There a Solution?

The Fed can follow several scenarios to handle the problem. The most obvious one is to tighten credit. This will boost people who have money to purchase products they need. On the other hand, tightened credits will not make other categories of consumers refuse the necessity of having these products. In other words, if you do not have money to buy food, you still want to eat.

The latest studies have shown that more than 60% of millennials believe they will never afford to buy the majority of things they need in life. This fact will also impact the purchasing force. At the same time, around 50% of consumers aged from 18 to 41 expect to cut down on costs and postpone bigger expenses like the home renovation or vacation.

Investors should also consider soaring prices and have a clear understanding of how to behave during inflation.