Americans holding large amounts of cash in savings accounts and money market funds may be losing purchasing power faster than they realize, according to Citi Wealth, which is urging investors to rethink oversized cash positions as inflation outpaces the returns available on many cash investments.
The warning comes after the latest inflation data showed price pressures accelerating across the U.S. economy. The Consumer Price Index rose at an annual rate of 4.2% in May, the highest level in three years. At the same time, the Personal Consumption Expenditures Price Index, the Federal Reserve's preferred inflation gauge, climbed to a seasonally adjusted annual rate of 4.1%, marking its highest reading since April 2023.
