A trader works, as a screen broadcasts a news conference by U.S. Federal Reserve Chair Jerome Powell following the Fed rate announcement, March 20. Reuters-Yonhap

Since retiring two years ago, Joan Harris has upped her travel game.

Once or twice a year, she visits her two adult children in different states. She's planning multiple other trips, including to a science fiction convention in Scotland and a Disney cruise soon after that, along with a trip next year to neolithic sites in Great Britain.

"I really have more money to spend now than when I was working," said Harris, 64, an engineer who worked 29 years for the federal government and lives in Albuquerque, New Mexico.

Back then, she and her now-ex-husband were paying for their children's college educations and piling money into savings accounts. Now, she's splurging a bit and, for the first time, is willing to pay for first-class plane tickets. She plans to fly business class to Scotland and has arranged for a higher-level suite on the cruise.

"I suddenly realized, with my dad getting old and my mom dying, it's like, ‘No, you can't take it with you,' " she said. "I could become incapacitated to the point where I couldn't enjoy something like going to Scotland or going on a cruise. So I better do it, right?"

Older Americans like Harris are fueling a sustained boost to the U.S. economy. Benefiting from outsize gains in the stock and housing markets over the past several years, they are accounting for a larger share of consumer spending — the principal driver of economic growth — than ever before.

And much of their spending is going toward higher-priced services like travel, health care and entertainment, putting further upward pressure on those prices — and on inflation. Such spending is relatively immune to the Federal Reserve's push to slow growth and tame inflation through higher borrowing rates, because it rarely requires borrowing.

Affluent older Americans, if they own government bonds, may even be benefiting from the Fed's rate hikes. Those hikes have led to higher bond yields, generating more income for those who own such bonds.

The so-called "wealth effect," whereby rising home and stock values give people confidence to increase their spending, is a big reason why the economy has defied expectations of a sharp slowdown. Its unexpected strength, which is contributing to stickier inflation, has forced a shift in the Fed's plans .

As recently as March, the Fed's policymakers had projected that they would cut their benchmark rate three times this year. Since then, though, inflation measures have remained uncomfortably high, partly a consequence of brisk consumer spending . Chair Jerome Powell made clear recently that the Fed isn't confident enough that inflation is sustainably easing to cut rates.

When the Fed meets this week, it is sure to keep its benchmark rate unchanged at a 23-year high, the result of 11 rate hikes. The Fed's hikes have forced up borrowing costs across the economy — for everything from home and auto loans to credit cards and business loans." (AP)