We’re living in the ‘G-shaped economy’—where boomers control $90 trillion, and everyone else waits

The key market implication is a redistribution of spending power toward households with the least sensitivity to wage growth and the most exposure to asset income. That favors payment rails and premium discretionary categories while leaving transaction-heavy housing proxies, first-time-buyer retailers, and lower-end consumer baskets more exposed to a slowdown that may not show up in headline consumption until later. In other words, the economy can look resilient even if labor income weakens, because the marginal spender is increasingly funded by balance sheets, not paychecks.

For markets, higher rates are not uniformly restrictive anymore: they are effectively a transfer from borrowers to cash-rich retirees via money-market income and locked-in housing equity. That makes the current regime less bearish for consumption than the consensus expects, but also more fragile than it looks because it depends on asset prices staying elevated. If equities fall 10-15% or home prices flatten, the wealth effect and parental support channel can shut quickly, while rate cuts would remove the MMF income tailwind before mortgage relief meaningfully lifts younger households.

The contrarian miss is timing: the benefit to spending can persist for quarters even with soft labor data, so bearish consumer trades may be early, but the reversal risk is also fast once asset prices roll over. The more interesting structural trade is not "long consumers" broadly; it is long cash-flow capture from spenders with strong balance sheets, short businesses reliant on new household formation and housing turnover.