Experts Warn Hoarding Cash Amid Inflation Surge and Fed Rate Hike

[Para 1: The Lead] Financial advisors warn of a cash hoarding trend as the Federal Open Market Committee raised its policy rate by 25 basis points to 5.25%–5.50% in December 2025, amid persistently high inflation and a 7.1% year-over-year CPI. The move is expected to keep borrowing costs elevated, slow economic growth, and temper asset prices through 2026. [Para 2: Supporting details & Context] The Federal Reserve cited continued weakness in labor markets and inflationary pressures from supply chain disruptions as reasons for the aggressive tightening. Advisors recommend maintaining a diversified, liquid portfolio and monitoring yields on Treasuries and savings deposits, which have fallen in lockstep with higher interest rates.