The 45 million richest U.S. households — roughly the top third of the country — spend nearly $15 trillion annually, which equals 70% of China's entire GDP and 3x Germany's economy, and this cohort has been completely insulated from inflation.
Michael highlights data from the Carlyle Group showing that 45 million affluent U.S. households account for $15 trillion in annual spending — nearly 70% of China's GDP. Part of this resilience comes from homeowners locking in low fixed-rate mortgages, saving $300 billion annually versus adjustable-rate regimes. ✦ AI generated
Michael Batnick · The Compound · 2026-07-29 · original ↗
starts at this moment · 26:40
The total outlays of 45 million US households is equal to nearly 70% of the entire Chinese economy. ... 45 million richest households in the USA ... account to combine for nearly 15 trillion in annual outlays. It's equal to three times the size of the entire German economy 70% of GDP of China. ... This is a third of the population and has not only been insulated from the inflation shock but also exhibits propensity to spend out of wealth and income.
verbatim transcript · starts at 26:40
26:24so in a diversified manner like this makes sense. I don't know how they handle like rebalancing and such, but >> I understand the argument. that private markets are so much bigger now. Forget about just like the growth equity stuff, but private credit infrastructure, there's a lot of, you know, the the world doesn't look the way the way it did 40 years ago. All right. Uh let's talk the economy. I
26:47I like this one from Carlile Group. Uh they talk about what the World Cup revealed about America and they they talk about people learning about the consumption habits here. There's some really interesting patterns here. Now, I we talked in recent weeks about the fact that low mortgage rates for people really help their disposable income and their spending. Uh 135 million US households, 50 million own a mortgaged
27:07home, virtually all of which have been financed by long-term fixed rates. Uh and so they're saying like that's a that's a big hedge. And if you want to think about this investment terms, I explained this to someone recently, having a fixed rate mortgage is like you're shorting the dollar. For all the people who say the dollar is going to decline forever and it's it's toast and you know what you want to do in that
27:26situation? You want to have a fixed rate mortgage for as long as you can because that's short the dollar. Uh so they say measure by the current distance between rates on new mortgages which is almost 6 and a half% which is over 6 and a half% and the effective rate paid on the outstanding stock of mortgages. So that's 4.3%. So you take everyone who has a mortgage right now and what's
27:44their average rate is 4.3%. You would be paying 6 and a half% 6.6%. disposable income among these households is 300 billion higher than it would have been if mortgage rates automatically reset to market levels >> as is common in other economies. So that savings that's why so many people have been able to spend so much money. You locked in a low rate. Now here's another one. This is this is really interesting.
28:03Speaking of World Cup, this So, somebody sent us a video showing what people spent at the World Cup and what what you just mentioned and excess what $300 billion. It all went to FIFA, by the way. I have no idea. Is is FIFA the organization that gets the money? I don't know how that works. >> Well, yeah, they run the World Cup. >> Okay, that's where all the money went. I
28:25want Can I Can I show you this share this video with you? >> Mhm. >> How much did you spend on your ticket? >> $50,000. >> 20,000. >> And what do you do for a I'm a model. >> 30,000. >> What do you do for a living? >> I retired. Made a lot of money. >> 200. >> And what do you do for a living? >> The PE hung
28:39>> 30,000. >> 30,000. What do you do for a living? >> I'm a streamer. I've been doing this since 2011. >> Not enough. There's no experience like the World Cup final. >> And what do you do for a living? >> I'm chairman CEO of the Kansas City Chiefs. >> I don't know. Friend gave it to me. >> And what do you do for a living? >> We're philanthropists.