Money funds get $38B deposits after debt-ceiling deal

Money funds get $38B deposits after debt-ceiling deal
Money-market mutual funds took in $24.9 billion yesterday, bouncing back from their second-worst week of withdrawals, as investors unsettled by the debate over raising the U.S. debt ceiling returned to the market.
AUG 12, 2011
Money-market mutual funds took in $24.9 billion yesterday, bouncing back from their second-worst week of withdrawals, as investors unsettled by the debate over raising the U.S. debt ceiling returned to the market. Investors, lead by institutions, have poured about $38 billion back into money funds in the past three days after pulling $103 billion out of the funds in the week ended Aug. 2, according to research firms Crane Data LLC and iMoneyNet, both based in Westborough, Mass. German equity funds got $400 million in deposits in the week, and emerging-market bond funds took in more than $1 billion for the second time this year, according to Cambridge, Massachusetts-based EPFR Global. “Its likely just a rebound of the Treasury outflows,” Peter Crane, president of Crane Data, said of the money-fund deposits in a telephone interview today. The inflows helped push money-market rates, which surged during the debate to raise the federal borrowing cap, below zero percent yesterday. Europe's sovereign-debt crisis also bolstered U.S. government securities' appeal as the world's safest assets. Bank of New York Mellon said yesterday it will charge large clients for excessive cash deposits, to pass on the cost of insuring the deposits. ‘Safe Haven' Renewed concerns about Europe's debt problems and slowing growth of the U.S. economy continued to cement emerging-market bond funds' status as a “safe heaven,” according to EPFR. The funds have taken in money for 19 straight weeks, totaling more than $19 billion this year. German equity funds' year-to-date intake is more than $16 billion, according to EPFR. The money-market withdrawals in the previous week, the worst since the bankruptcy of Lehman Brothers Holdings Inc. in September 2008, may have contributed to a flood of cash going into banks, where deposits have been insured without a limit since the 2008 financial crisis. BNY Mellon said it will charge customers with more than $50 million 13 basis points, or 0.13 percentage point, for “excess” deposits after a flight to safety left the bank with elevated cash levels. --Bloomberg News--

Latest News

The fight over the CFPB is just beginning
The fight over the CFPB is just beginning

Locked out of their offices and told to stay home, employees at the Consumer Financial Protection Bureau have asked the courts to intervene as Elon Musk and Republican leaders move to shut down the agency that was established to protect people from predatory lending and financial scams.

Business-focused wealth tech RISR lands $8B Wealthcare Capital Management partnership
Business-focused wealth tech RISR lands $8B Wealthcare Capital Management partnership

Fintech platform interVal has also introduced a new feature to help advisors support entrepreneurial business owner clients better.

LPL boosts revenue potential with amped-up alts platform
LPL boosts revenue potential with amped-up alts platform

Along with greater revenue, alternative investments also carry risks, one industry lawyer noted.

How SageSpring Wealth Partners' next-gen strategy has fueled its success
How SageSpring Wealth Partners' next-gen strategy has fueled its success

President Jeff Dobyns unpacks the strategic power of mentorship, what makes an "ideal team player," and how the firm's 89 percent success rate has paid off for veteran advisors.

Powell heads for hot-seat hearings with ongoing pressure from Trump policies
Powell heads for hot-seat hearings with ongoing pressure from Trump policies

The Fed chair is in for some "hyper-charged" meetings, with legislators likely to raise questions on tariff threats and apparent steps to comply with anti-DEI orders.

SPONSORED Taylor Matthews on what's behind Farther's rapid growth

From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.

SPONSORED Why wealth advisors should care about the future of federal tax policy

Blue Vault features expert strategies to harness for maximum client advantage.