Inflation hits money markets hard by forcing central banks to raise short-term rates, which boosts yields on money market funds and Treasury bills but increases borrowing costs for businesses. While higher nominal returns might look appealing, inflation often erodes the real purchasing power of these investments—meaning you could earn 3% while losing 2% in actual buying power if inflation runs at 5%. Money markets become a safe haven during inflationary uncertainty, but the constant push-and-pull between rising rates, eroding returns, and increased funding costs makes them a key battleground where monetary policy meets everyday investing. #inflation #moneymarkets #investing #economy