Forget the K-Shaped Economy? Ed Yardeni Says Boomers’ $90 Trillion Wealth Is Making America ‘G-Shaped’ — Here’s What That Means

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The U.S. economy may not be as divided as the popular "K-shaped" narrative suggests. Economist Ed Yardeni says a generational divide better explains why consumer spending has remained resilient.

Yardeni, a longtime Wall Street economist and founder of Yardeni Research, calls this the "G-shaped economy." In an Aug. 3 research note, he argued that older Americans have accumulated far more wealth than younger generations, while financial support from older households is helping younger Americans cope with affordability pressures.

The K-shaped economy describes a widening gap between higher- and lower-income Americans, with the two groups experiencing different trends in income, spending and wealth. Recent debate has focused on whether that divide is still widening or beginning to narrow.

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Yardeni offers a different explanation. He argues that consumer spending is resilient largely because of a generational wealth divide: older Americans are significantly wealthier than younger Americans, but they are also helping younger family members financially.

That matters because consumer spending is the largest component of GDP. It grew at a 3.2% annualized rate in the second quarter, up from 0.5% in the first quarter, while consumer spending contributed 2.1 percentage points to Q2 GDP growth.

Baby Boomers had nearly $90 trillion in net worth as of the first quarter of 2026, representing about 52% of total U.S. household wealth. The Silent Generation held another $20 trillion, much of which Yardeni expects eventually to pass to their Boomer children.

That concentration of wealth means consumer spending is increasingly supported by accumulated retirement wealth rather than labor income.

The wealth effect can also support spending without a corresponding jump in wages.

Boomers control approximately 54% of household corporate equities and mutual funds, worth nearly $30 trillion. They also own approximately 41% of household real estate wealth, the largest share of any generation.

Rising stock and home prices can therefore strengthen the balance sheets of a generation that already holds a large share of those assets.