The cash parked at money market funds climbed to a fresh record, with the largest inflows in about three weeks, as investors piled into assets offering relatively safer returns amid uncertainty around talks over extending the U.S. debt limit to avert a default.
With the Federal Reserve raising its main policy rate to its highest level in 16 years earlier this month in the most aggressive hiking cycle in decades, short-term rates above 5% continue to lure investors to money market assets.
The latest rise comes as the debt-ceiling impasse in Washington continued to plague rates for securities maturing in early June, a corner of the bill curve seen most at risk of nonpayment if the government exhausts its borrowing capacity. Meanwhile, traders priced in greater odds of another rate increase over the next two Fed meetings.
About $46.7 billion poured into U.S. money market funds in the week ended Wednesday, the largest intake since May 3, according to data from the Investment Company Institute. Total assets reached an unprecedented $5.39 trillion versus $5.34 trillion in the week ended May 17.
The week before, about $13.6 billion in net new money flowed into the funds.
Over the past week, in addition to resilient economic data and comments by Fed officials on the outlook for the rate path, markets have focused on negotiations in Washington to avoid a first-ever default. House Speaker Kevin McCarthy said Thursday issues remain in talks with the Biden administration on raising the federal debt limit as the clock ticks down to the point when the government runs out of cash. Treasury Secretary Janet Yellen has repeatedly warned that could become a risk as soon as June 1.
In a breakdown for the week to May 24, government funds, which invest primarily in securities like Treasury bills, repurchase agreements and agency debt saw assets rise to $4.48 trillion, a $41.25 billion increase. Prime funds, which tend to invest in higher-risk assets such as commercial paper, saw assets climb to $796 billion, a $6.48 billion increase.
Nearly half of single Americans think their net worth shapes their fate in dating, but the biggest financial green flags tell a different story.
The hybrid RIA is the latest firm to face allegations that it enriched itself at customers' expense by paying unfairly low interest rates in its cash sweep programs.
Installed after Dan Arnold's abrupt termination, the new leader at LPL Financial is highlighting the firm's refocusing on the individual advisor.
The clearing and custody giant is kicking the tires on new cash sweep plan with broker-dealer clients.
LPL Financial welcomes a $345 million investment and planning team from Ameriprise as RayJay's employee advisor arm adds a seasoned Well Fargo breakaway.
From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.
Blue Vault features expert strategies to harness for maximum client advantage.