True or false?
The statement is false. It would be a true statement if people expect that such interest rate increases will be followed by declines. But why would we expect that to be so in all situations? One could just as reasonably argue that the rise in interest rates will cause people to expect further increases on the grounds that something fundamental has changed. These sorts of arguments are examples of theorizing by plausible surmise. The reason why people tend to hold less money when interest rates rise is that nominal interest rates represent the cost of holding money---when something becomes more costly in relation to the benefits it provides people want less of it, everything else being the same.
The argument posed in the question was put forward by the great economist John Maynard Keynes (1880-1946) to rationalize what he called the speculative demand for money. It is plausible that interest rates will tend to revert to normal levels but, though speculative shocks to the demand for money sometimes occur, there is no reason in general to believe that major upward movements of interest rates will always be followed by subsequent downward movements---for example, the government might be choosing to follow a more inflationary monetary policy.