Citi Wealth just told investors to stop holding cash because inflation is hot. Not warm. Not elevated. Hot. As if inflation's temperature reading matters more than the fact that every asset class is pricing in a recession that may or may not arrive depending on which economist you asked three minutes ago.
The bank wants you to move out of short-term instruments. They have suggestions for where that money should go instead. Those suggestions will definitely generate fees for Citi Wealth. Pure coincidence.
Here's what they won't tell you. Cash paid nothing for a decade and they begged you to buy equities at any valuation. Then cash paid 5% and they told you to stay in equities because you can't time the market. Now cash pays less but inflation ticked up so suddenly cash is the enemy again. The enemy changes based on what products they need to move that quarter.
Retail traders will read this headline and panic-sell their money market funds on Monday. They'll rotate into whatever Citi recommends. They'll pay the spread. They'll hold for six weeks until the next bank publishes the opposite take. Then they'll rotate again. They'll call this investing.
The advice assumes inflation stays hot. It assumes rates don't spike again. It assumes you won't need that cash for an emergency or a better opportunity next month. It assumes the thing Citi wants you to buy won't drop 15% the day after you buy it. Big assumptions for people who didn't see 2008 coming.
But sure. Take investment advice from a bank that needed a government bailout. Move your safe assets into riskier ones because a wealth management division that profits from transactions told you to. What could go wrong besides everything.
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