Baby boomers appear to be cruising through the cost of living crisis - and risk pushing up interest rates as they continue to spend.
The older generation that lived through 18 per cent interest rates in 1989 are now the ones suffering the least from the Reserve Bank's 13 interest rate rises in 18 months.
The most aggressive rate hikes in a generation are disproportionately hurting the young and sparing the old, with the cash rate now at a 12-year high of 4.35 per cent.
Grattan Institute economist Brendan Coates said baby boomers, who are more likely to own their own home, were the ones adding to inflation with their spending.
'The fact that we've got so many cashed-up, older Australians at the moment that aren't really being affected by higher interest rates, means it's taking bigger interest rate hikes to get inflation under control,'
'Older Australians, they've typically paid off their home and therefore the increase in living costs is much smaller because they're not being hit by higher interest rates,' Mr Coates said.
Baby boomers made up 21.5 per cent of Australia's population in the last Census in 2021, outnumbering Generation X on 19.3 per cent, Generation Z on 18.2 per cent but tying with Millennials on 21.5 per cent.
Having paid off their home this group, born between 1946 and 1964, are the ones who benefit when the RBA cash rate increases, especially if they have their savings in a term deposit account.
'It is fair to say many older people win when interest rates rise and younger people tend to lose,' Mr Coates said.
'Those that are less affected by mortgage costs, like the baby boomers, are the ones continuing to spend in the economy.'
