economy
Citi Wealth warns investors to move out of excess cash because of hot inflation
Here is where Citi Wealth would put that money to work instead of short-term instruments.
TL;DR
- Inflation is at multi-year highs, with the CPI at 4.2% and PCE at 4.1% annually.
- Yields on cash assets like money market funds are below inflation rates, leading to negative real returns.
- Americans are holding record amounts of cash, which can erode purchasing power.
- Citi Wealth recommends reducing excess cash and considering investments like dividend stocks or short-duration, high-quality bonds.
- The appropriate amount of cash depends on an investor's spending profile and financial objectives.