Federated's Debbie Cunningham writes in the company's latest "Month in Cash", "We concur with the Fed's view that the deceleration in the rate of economic expansion will prove temporary and that another recession is not on the horizon.... Bernanke's recent assertion that 'monetary policy cannot be a panacea' for all that ails the U.S. economy implies that the Fed believes it has done what it can to promote growth and is anxious to normalize monetary policy as conditions warrant.... However, given the Fed's overarching desire to avoid a repeat of Japan's disastrous experience with deflation, benchmark interest rates probably will not begin moving higher for another two or three FOMC meetings.... Given what we perceive to be a dearth of value across the cash curve, we are focusing new purchases on short-term securities, which carry less interest rate risk and also provide the liquidity necessary to lock in higher yields as they appear. Of course, we are carefully monitoring the events in Greece given modest positions in some of the European banks that hold at least some Greek government bonds on their balance sheets. Our analysis indicates that Federated's exposure of those large financial institutions is limited, manageable and represents no meaningful threat to the banks themselves or to our holdings. As always, we will remain vigilant to these and other issues which potentially might impact the pools, whose creditworthiness remains our highest priority." See also, Reuters' "U.S. money funds diverge on European bank paper" and Dow Jones' "Greece Jitters Spark Hefty June Redemptions From US Money-Market Funds".

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