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Opinion
Narayana Kocherlakota

If You're Over 65, You Should Love the Fed

Monetary policy has favored retirees.
Not so bad.

Not so bad.

Photographer: Tim Boyle/Bloomberg

Conventional wisdom suggests that monetary stimulus is particularly bad for senior citizens: When the Federal Reserve holds interest rates low, retirees tend to get less income from their nest eggs. Over the past eight years, though, they've done a lot better than this simple logic would imply.

Consider the amount of goods and services that seniors consume -- an important indicator of their well-being. According to the Consumer Expenditure Survey, the average household headed by someone aged 65 or older consumed 5 percent more in 2014 than in 2007, adjusted for inflation. That compares to declines of 5 percent for all households and 7 percent for households headed by someone aged 35 to 44.