Chart of the Month: Cash Is No Longer Trash
Source: Federal Reserve Bank of St. Louis
Short-term interest rates have soared to their highest level in nearly a decade as the Federal Reserve continues to normalize interest rates. With the Fed expected to continue lifting interest rates further, as the economy strengthens and inflation rises, cash investments and short-term bonds are the most appealing they have been in a long time–ending the era of stocks as the only game in town. This is welcome news for older savers and retirees, whose investment returns may have struggled to keep pace with inflation since early 2008. As stock market volatility picks up and with bond yields likely to head higher in the coming months, cash investments are now a reasonable alternative to equities and bonds.
Note: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.
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