Austin Hankwitz, co-host of the Rich Habits Podcast, has a blunt message for anyone still parking serious money in a checking account: “It’s never been more important” to be in the market so “your money is growing with you, your net worth, everything you own is trending up and to the right by 8, 10, 12, 14% on an annualized basis in the markets.” His warning lands at an awkward moment for cash hoarders. Inflation has cooled from its 2022 peak, but it has not gone away, and idle dollars are quietly losing ground every month.
The math working against cash right now
Headline inflation is still grinding higher. The Consumer Price Index sits at 332.4 as of April 2026, up 0.6% from a month earlier, and the Fed’s preferred gauge tells the same story. Core PCE has climbed from 125.79 in May 2025 to 129.28 in March 2026, with the most recent monthly reading up 0.7%. That percentile rank, the 90.9th, tells you everything: prices are not normalizing toward the Fed’s 2% target as quickly as anyone hoped.
This is the “sticky inflation” backdrop Hankwitz keeps returning to. Even a modest annual erosion compounds. A dollar that sits in a non-yielding account for a decade does not just lose a sliver of value; it loses real spending power year after year while consumer prices keep climbing. You can verify the trajectory yourself on the St. Louis Fed’s Core PCE series.
What the market has actually paid investors
The opportunity cost of staying in cash is concrete. The SPDR S&P 500 ETF Trust (NYSEARCA:SPY | SPY Price Prediction) is up 23.35% over the past year, 76.68% over five years, and 257.06% over the past decade. Even with this month’s pullback (SPY is down 0.6% on the week to $733.73), the long-run figure validates the 8% to 14% annualized range Hankwitz cited.
Volatility, the usual excuse for sitting things out, is not extreme. The VIX is at 17.82, within the normal 15-20 range, well off the 31.05 spike from March 27, 2026. Fear is fading.
The practical split
Hankwitz’s framework is simple. Emergency cash belongs in a vehicle that at least keeps pace with inflation: “park it in a high yield savings account to earn that interest to help combat inflation.” Everything beyond that buffer should be working in the market.
The rate environment makes the first step easy. The Fed funds upper bound is 3.75%, after 75 basis points of cuts since September 2025. Short-term Treasuries reflect that: 4-week T-bills yield 3.64%, 26-week yield 3.74%, and 52-week yield 3.82%. The 10-year Treasury sits at 4.61%, near a 12-month high. Savers who shop around can capture a real yield without taking equity risk on money they may need in six months.
The macro anchor
The same podcast episode flagged the ongoing Trump-Xi summit in Beijing, where President Trump brought “$20 trillion worth of CEOs” to negotiate trade deals worth $30 to $50 billion. Headlines like that, combined with consumer sentiment at 53.3, down from 56.6 the prior month and well below the neutral threshold of 80, explain why so many households are hugging cash.
The savings rate has slipped from 6.2% in Q1 2024 to 4.0% in Q1 2026, even as per-capita disposable income has climbed to $68,617. Households are spending more and saving a smaller share. The question worth sitting with: is the cash you do keep actually earning anything?
What to watch next
Two data points will shape the cash-versus-market debate over the next quarter. The next core PCE print will signal whether the Fed has room to cut further, which would pull HYSA yields lower and reduce the reward for sitting in cash. And consumer sentiment, currently in the 27th percentile historically, has a 1-3 month lead on spending. A rebound there often precedes equity strength. Hankwitz’s broader point survives either outcome: cash that is not earning a yield close to inflation is shrinking, quietly, every single month.
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