ICI published its latest weekly "Money Market Fund Assets" report, Thursday. The weekly series shows money fund assets rising $31.7 billion to $6.913 trillion, after falling $125.4 billion the week prior and falling $25.4 billion two weeks ago. Massive (presumably) tax-related outflows make last week the largest weekly outflow in history. But money fund assets have still risen in 25 of the last 38, and 36 of the last 53 weeks, increasing by $609.0 billion (or 9.7%) since the Fed cut on 9/18/24 and increasing by $935.1 billion (or 15.6%) since 4/24/24. MMF assets are up by $935 billion, or 15.6%, in the past 52 weeks (through 4/23/25), with Institutional MMFs up $482 billion, or 13.5% and Retail MMFs up $453 billion, or 18.9%. Year-to-date, MMF assets are up by $62 billion, or 0.9%, with Institutional MMFs down $57 billion, or -1.4% and Retail MMFs up $119 billion, or 4.3%.
ICI's weekly release says, "Total money market fund assets increased by $31.66 billion to $6.91 trillion for the week ended Wednesday, April 23.... Among taxable money market funds, government funds increased by $21.21 billion and prime funds increased by $7.00 billion. Tax-exempt money market funds increased by $3.45 billion." ICI's stats show Institutional MMFs increasing $25.7 billion and Retail MMFs increasing $6.0 billion in the latest week. Total Government MMF assets, including Treasury funds, were $5.643 trillion (81.6% of all money funds), while Total Prime MMFs were $1.133 trillion (16.4%). Tax Exempt MMFs totaled $137.0 billion (2.0%).
It explains, "Assets of retail money market funds increased by $5.98 billion to $2.85 trillion. Among retail funds, government money market fund assets decreased by $531 million to $1.81 trillion, prime money market fund assets increased by $3.73 billion to $920.11 billion, and tax-exempt fund assets increased by $2.77 billion to $125.33 billion." Retail assets account for well over a third of total assets, or 41.3%, and Government Retail assets make up 63.4% of all Retail MMFs.
They add, "Assets of institutional money market funds increased by $25.69 billion to $4.06 trillion. Among institutional funds, government money market fund assets increased by $21.74 billion to $3.83 trillion, prime money market fund assets increased by $3.27 billion to $212.51 billion, and tax-exempt fund assets increased by $677 million to $11.69 billion." Institutional assets accounted for 58.7% of all MMF assets, with Government Institutional assets making up 94.5% of all institutional MMF totals.
According to Crane Data's separate Money Fund Intelligence Daily series, money fund assets have fallen by $31.3 billion in April (through 4/23/25) to $7.292 trillion, hitting a record high of $7.384 trillion on April 3. Assets rose by $2.8 trillion in March, $94.2 billion in February, $52.8 billion in January, $110.9 billion in December, $200.5 trillion in November, $97.5 billion in October, $149.8 billion in September, $109.7 billion in August, $16.6 billion in July, $15.7 billion in June and $91.4 billion in May. They declined by $15.8 billion in April 2024. Note that ICI's asset totals don't include a number of funds tracked by the SEC and Crane Data, so they're over $330 billion lower than Crane's asset series.
In other news, Northern Trust reported Q1 2025 Earnings earlier this week. On the earnings call, Chairman & CEO Mike O'Grady comments, "As it relates to liquidity, we've seen a healthy increase in deposit levels as a number of clients have taken a risk-off approach, reallocating portfolios and raising cash."
He explains, "In Asset Management, we generated positive liquidity flows in the first quarter, continuing the trend we've seen over the past nine quarters. Beyond liquidity, our suite of actively managed offerings, which skew towards high quality, low volatility and tax efficient products tend to perform very well in the current environment and we're seeing significant client interest. We had $1.7 billion of inflows into our custom tax optimized SMAs, which are capitalizing on market volatility to deliver increased after-tax value. We are also broadening our ETF platform, having recently filed to launch 11 new fixed income ETFs later this year."
O'Grady says, "Our average earning assets were up 3% on a linked quarter basis, fueled by higher deposit levels which drove an increase in cash held at the Fed and other central banks. The duration of our securities portfolio remained at 1.6 years and the total balance sheet duration continues to be less than one year. Net interest income on an FTE basis was $574 million, flat with the fourth quarter and our net interest margin was 1.69%, down 2 basis points quarter-over-quarter. NII outperformed our expectations largely due to higher-than-expected deposit levels. Average deposits were $116 billion, up 3% compared to fourth quarter levels. Within this, interest bearing deposits increased by 4% and non-interest-bearing deposits decreased by 3%, but remained at 15% of the overall mix. Deposit pricing was largely as expected. Institutional deposit betas remained high and wealth deposit betas were stable."
Asked about the deposit beta during the Q&A, he replies, "Our deposit betas remained relatively stable if you look historically, but I would say that it's obviously going to be higher for the institutional business, closer to 100%, and then lower for wealth, 60% to 70% roughly. I will also point out though that we have spent a lot of time on our deposit pricing. I mentioned this in the last earnings call and thinking a little bit about tiering and the size of our deposits where we get our deposits. So, I think having spent more time doing that, I think it's really -- it's benefited the deposit betas on the positive side."
When asked about rapid rate cuts, CFO Dave Fox comments, "Yeah, we have -- in our model, we've got two or three rate cuts potentially in there. From our perspective, it doesn't really impact it all that much to be honest with you. The NIM compression really doesn't start until we get much, much lower rates. And if you want to think about it, roughly speaking, a 25 basis point rate cut, it translates into less than $1 million a month for us. So, it isn't something that we anticipated, but it isn't something that's going to prevent us from hitting our goal."
Another analyst says Northern is "assuming fairly stable deposits" and adds, "Maybe give us an update on kind of how things stand so far in April, both in terms of the level and the mix just given all the volatility we've seen so far in the second quarter." Fox answers, "Deposit levels are hanging in there. And obviously, March 31st was a point in time. But at the end of the day, our clients ... have taken a somewhat of a risk-off position in the marketplace and I think they view Northern as a good place to put their deposits. So from our perspective, the deposit levels are driving a little bit, obviously, of the guide I've given you going forward and we don't see them abating obviously for the next couple of months. And so from that perspective, we feel pretty good about that."
The analyst adds, "It sounds like non-interest-bearing deposits are still kind of hanging at around the same level in terms of percentages, but what would change that and what sort of the client segment that will be most responsible, I guess, for that shift?" Fox says, "Yeah, so keep in mind that 50% of our securities reprice in 90 days or less and over 80% of the book is in US dollars. And then we've got about $1 billion of fixed securities that run-off each quarter and then are being reinvested in fixed and floating. And we have -- our duration has gone up a little teeny bit. We have been taking the opportunity to think a little bit about protecting '26, if you will, so -- from that perspective. So -- and also keep in mind that about 70% of our deposits are in US dollars, right? So there are opportunities for us to do some arbitrage opportunities between those currencies and things of that nature. And then as I said before, deposit betas are going to remain pretty steady until we get to much lower interest rate levels. So that's sort of what's driving the NII outlook."
