DWS asks, "What now for record U.​S. money market funds?" They comment, "Holdings of U.​S. money market funds have grown strongly over the past two years, breaking record after record. The question has been whether rate cuts by the Federal Reserve (​Fed) would bring their rise to a halt. Not so far. Since the Fed'​s first interest rate cut in September, the amount invested in these funds has risen by a further $​40 billion [​sic] to $​6.​65 trillion. Depending on the source, some reports even put the figure above $​7 trillion. Although there was a slight setback last week according to the data provider ICI, we do not believe there is any reason to expect any major change and a wave of withdrawals from money market funds in the near future. Investors still seem to be comfortable with these short-​term investments, especially as the Fed has recently scaled back expectations of rate cuts this year and next." DWS explains, "​In our CIO Special from May 21, 2024, we had already suggested that rapid outflows were unlikely. However, we have to admit that we did not anticipate the further rise in inflows that we have seen recently. Since Donald Trump'​s victory in the U.​S. presidential election at the beginning of November, the question marks surrounding U.​S. political developments and market reactions have not diminished. As a result, we do not expect any major changes to the status quo for U.​S. money market funds in the short term. The conclusions of our Special therefore remain valid. In our view, U.​S. money market funds remain an attractive haven for investors in times of nervous markets."

Your Name:
Your Email:
Recipient Email(s):

Use a comma or a semicolon to separate

Please retype symbols from the image:

Optional Message

Daily Link Archive