Crane 100 Index Grinds Higher to 3.63%
Money fund yields inched higher yet again last week -- the Crane 100 Money Fund Index (7-Day Yield) rose 3 more basis points to 3.63% in the week ended Friday, 12/9. Yields rose by 3 basis points the previous week and are up from 2.88% on Oct. 31 and 2.66% on Sept. 30. Yields should jump again and approach 4.0% by year end, if, as expected, the Fed hikes rates again (probably by 50 bps) on Wednesday, Dec. 14. The top-yielding money market funds have broken above 4.0% and should move towards 4.5% in coming weeks (see our "Highest-Yielding Money Funds" table above). Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 678), shows a 7-day yield of 3.53%, up 5 bps in the week through Friday. Prime Inst MFs were up 3 bps to 3.77% in the latest week. Government Inst MFs rose by 8 bps to 3.55%. Treasury Inst MFs up 5 bps for the week at 3.55%. Treasury Retail MFs currently yield 3.34%, Government Retail MFs yield 3.29%, and Prime Retail MFs yield 3.61%, Tax-exempt MF 7-day yields were up at 1.76%. According to Monday's Money Fund Intelligence Daily, with data as of Friday (12/9), just 112 funds (out of 817 total) still yield between below 2.0%, with assets of $68.4 billion, or 1.3% of total assets; 64 funds yielded between 2.00% and 2.99% with $72.0 billion, or 1.4%; 641 funds yield 3.00% or more ($5.028 trillion, or 97.3%), and 22 funds have now officially broken over the 4.0% yield barrier. Our Brokerage Sweep Intelligence average was unchanged last week at 0.43%, but sweep rates rose the prior week as Fidelity increased its FDIC insured sweep rate to 1.94% from 1.57%. The latest Brokerage Sweep Intelligence, with data as of Dec. 9, shows that just 3 of 11 major brokerages still offer rates of 0.01% for balances of $100K (and lower tiers). These include: E*Trade, Merrill Lynch and Morgan Stanley.
