Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., May 9, 2022. Brendan Mcdermid | ReutersAmerican millionaires are raising cash in response to lingering inflation fears, according to CNBC’s Millionaire Survey.Millionaires surveyed by CNBC ranked inflation as the top risk to both the economy and their personal wealth. It’s the first time since the survey began in 2014 that inflation has edged out all other risks in the ranking. Forty-two percent of millionaires said inflation will last “at least a year or two,” and another 19% said it would last more than two years, according to the results.The survey includes investors with at least $1 million in investible assets. It was conducted in May and surveyed approximately 750 respondents who reported that they are the financial decision-makers or share jointly in financial decision-making within their households. Since the survey was conducted, a readout of consumer prices found inflation accelerated further last month and the S&P 500 slipped into a bear market, more than 20% off its recent highs. “Clearly, there is a shift to a very pessimistic concerned outlook,” said George Walper, president of Spectrem Group, which conducts the CNBC Millionaire Survey. “They are not confident that the Federal Reserve can handle these problems.”The Federal Reserve is expected to raise interest rates Wednesday by as much as 75 basis points. The central bank will also offer an updated economic outlook amid persistent inflation.Millionaires are divided on the Fed’s ability to slow inflation or reduce demand without causing a recession, according to the survey. Thirty-five percent said they are “not at all confident” in the Fed’s ability to manage inflation, while nearly half said they are “somewhat confident.”Views of the Fed diverge largely along political affiliation: Most Republican millionaires said they are “not at all confident” in the Fed’s ability to manage inflation, while most Democratic millionaires said they are “somewhat confident.”More than a quarter of millionaires believe the U.S. is already in a recession, and another 34% said the U.S. will tip into recession this year. Only 21% said the U.S. is not headed for a recession.”They’re very clearly concerned about a recession, and we’ll only know in 6 months whether we’re in one now,” Walper said.Millionaires own about 90% of the individually held stocks in the U.S. So far, they aren’t panicking or selling, according to the survey. But most are raising more cash and moving more money into short-term fixed income investments given rising interest rates.Nearly 40% of millionaires said they plan to make changes to their portfolio or have already made changes due to inflation, 44% said they have kept more money in cash, and 41% say they have purchased more fixed-rate investments. Of those surveyed, 35% said they have purchased equities and 31% said they have sold equities due to inflation and its impact on certain sectors and stocks.Wealthy investors are typically among the first to take advantage of market declines and buy during major market declines since they can afford to be more aggressive. Yet so far, millionaires show little sign of buying the recent market declines, suggesting they see more pain ahead for markets and interest rates.”When volatility slows down and people feel like we’re near a bottom, this is the group that makes moves and looks for distressed opportunities and good values,” Walper said. “They did it in April of 2020. But we’re not seeing that now. They don’t see this ending anytime soon.”Fifty-eight percent of millionaires expect the economy to be weaker or “much weaker” by the end of the year, according to the survey. Most also expect the S&P 500 to end the year down double digits: More than half of those surveyed expect the S&P to be down at least 10%, while nearly one in five respondents expect it to be down at least 15%.Millionaires have also ratcheted down their expectations for their own investment returns — though they’re still more bullish on their returns than the overall market. One in four of those surveyed expects to post negative returns, and a majority expects returns of less than 4%.Last year half of millionaires surveyed expected returns at least 6%.