Daily Links Archives: October, 2025
MMFs Heading to Boston for AFP'25
Money market mutual fund distributors and cash managers will be travelling to Boston next week for AFP 2025, the Association for Financial Professionals' big annual gathering of corporate treasurers, which takes place October 26-29. AFP is the largest gathering of corporate investors in the country, attracting over 5,000 treasury management professionals, as well as a host of large banks and institutional money fund managers. Though the exhibit hall and parties are where the action is (for the cash world anyway), there are a few sessions that involve money funds and cash investing. (See the Session Explorer here.) On Sunday, Oct. 26, sessions of interest include: "Cash Management & Investments Roundtable - Current Practices, Trends, and Strategies," run by Jeff Rayis of Indiana Wesleyan University; "DLT & Stablecoins 101: Corporate Use Case," which features Ritu Kothari of BNY, Kammy Tsang of Capital Bridge Advisory, Esteban Bunge of Chevron and David Byrd of Ernst & Young. On Monday, October 27, sessions include: "Blueprints from the Boardroom: Crafting a Winning Investment Framework," which features, Len Brooks of Regeneron Pharmaceuticals, Kevin Fitzgerald of BlackRock, and Jamie Cortas of Dell Technologies. On Tuesday, Oct. 22, sessions include: "Corporate Cash Confidence: Rethinking Safety and Liquidity with T-bill Agents," which features Xavier Audibert and Rachel Green of Jiko; "An Unfiltered Perspective on AI Use Within Cash Forecasting & Liquidity Management," which features Kimberly Kelly-Lippert of Honda, Jessica Siu of Authentic Brands Group, and Zach Brown of Tradeweb; "Attaining Zen in Your Commercial Paper Program," which features Caleb Johnson of Koch Companies, Jeffrey McPhee of Analog Devices Inc., Garret Sloan of Wells Fargo, and Sylvie Soundaravelou of TotalEnergies SE; and, "The Secret is Out: Riding the Yield Curve" which features Brandon Hillstead of Autodesk, Erica MacMillian of Wendy's <b:>`_, Vanessa McMichael of Wells Fargo, and Jeffery Weaver of Allspring. Come visit Crane Data at Booth #2135, and we look forward to seeing you all in Boston! Finally, thank you once more to those who supported last month's European Money Fund Symposium, which took place Sept. 22-23 in Dublin, Ireland. Mark your calendars for our next live event, our "basic training" Money Fund University, which will take place December 17-18 at The Westin in Pittsburgh. Crane Data is also preparing the preliminary agenda for our next Bond Fund Symposium, which will be held March 19-20, 2026, at the Hyatt Regency Hotel in Boston. We'll also soon be making plans for our next "big show," Money Fund Symposium, which will be held June 24-26, 2026, at The Hyatt Regency in Jersey City, NJ, and for next year's European Money Fund Symposium, which will be held Sept. 24-25 in Paris, France. Watch for details on these shows in coming weeks and months.
Jiko Deal w/ Coinbase and Partners
A press release titled, "Jiko Announces Strategic Investments from Key Industry Players Including Coinbase and Blockstream Capital Partners," tells us, "Jiko ... announced strategic backing by Coinbase (COIN) and Blockstream Capital Partners. Alongside this investment, Jiko is entering new strategic partnerships with leading industry players, including Crypto.com, Blockstream Capital Partners, Bitso, and Coinbase. These strategic partners will join a growing number of institutions adopting Jiko as a banking partner to utilize its U.S. T-bill-based model for storage, settlements, and payments." Stephane Lintner, Co-Founder and CEO of Jiko, comments, "The crypto world moves in milliseconds. The fiat world takes days. That mismatch creates friction and risk, breaking the promise of programmable money. Today's digital economy needs banking rails built for digital markets. We're proud that Coinbase, Blockstream Capital Partners, Bitso, and Crypto.com have chosen Jiko as a strategic partner." Roger Bartlett, VP, Institutional at Coinbase says, "Bringing U.S. T-bill access onto an always-on platform is an important step in how markets evolve. Jiko's approach and technology are a good fit with the pace at which we're building, and we're pleased to support Coinbase's investment in Jiko through the JikoNet platform." The release adds, "Jiko, which owns a national bank, was built on privacy-first principles where corporate cash is invested in U.S. T-bills in real time on behalf of the customer, offering unprecedented safety and scale. Jiko recently announced the launch of JikoNet, a 24/7 fiat-settlement network designed for institutions to safely transact in U.S. dollars at all times."
ICI: MMFs Lower; 2nd Drop in 13 Weeks
The Investment Company Institute's latest weekly "Money Market Fund Assets" report shows money fund assets decreasing by $17.8 billion to $7.367 trillion. But assets have still risen in 3 of the last 4 weeks, and 11 of the past 13 weeks. MMFs rose $19.9 billion the prior week to a record $7.385 trillion, after rising $50.5 billion two weeks prior. MMF assets are up by $900 billion, or 13.9%, over the past 52 weeks (through 10/15/25), with Institutional MMFs up $528 billion, or 13.7% and Retail MMFs up $372 billion, or 14.2%. Year-to-date, MMF assets are up by $517 billion, or 7.5%, with Institutional MMFs up $267 billion, or 6.5% and Retail MMFs up $250 billion, or 9.1%. ICI's weekly release says, "Total money market fund assets decreased by $17.75 billion to $7.37 trillion for the week ended Wednesday, October 15, the Investment Company Institute reported.... Among taxable money market funds, government funds decreased by $14.96 billion and prime funds decreased by $3.27 billion. Tax-exempt money market funds increased by $473 million." ICI's stats show Institutional MMFs decreasing $15.9 billion and Retail MMFs decreasing $1.9 billion in the latest week. Total Government MMF assets, including Treasury funds, were $6.019 trillion (81.7% of all money funds), while Total Prime MMFs were $1.208 trillion (16.4%). Tax Exempt MMFs totaled $141.1 billion (1.9%). It explains, "Assets of retail money market funds decreased by $1.89 billion to $2.99 trillion. Among retail funds, government money market fund assets decreased by $111 million to $1.88 trillion, prime money market fund assets decreased by $2.31 billion to $979.31 billion, and tax-exempt fund assets increased by $534 million to $128.38 billion." Retail assets account for 40.5% of the total, and Government Retail assets make up 62.9% of all Retail MMFs. They add, "Assets of institutional money market funds decreased by $15.87 billion to $4.38 trillion. Among institutional funds, government money market fund assets decreased by $14.85 billion to $4.14 trillion, prime money market fund assets decreased by $958 million to $228.38 billion, and tax-exempt fund assets decreased by $61 million to $12.69 billion." Institutional assets accounted for 59.5% 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 increased by $38.9 billion to $7.746 trillion for October as of October 15, hitting a record high of $7.774 trillion on October 9. Assets increased by $105.2 billion in September, $132.0 billion in August, $63.7 billion in July, $6.7 billion in June and $100.9 billion in May. They fell by $24.4 billion in April, but rose $2.8 trillion in March, $94.2 billion in February and $52.8 billion in January. They jumped $110.9 billion in December, $200.5 billion in November, and $97.5 billion last October. Note that ICI's asset totals don't include a number of funds tracked by the SEC and Crane Data, so they're almost $400 billion lower than Crane's asset series.
ICI's Money Fund Holdings Summary
The ICI released its latest monthly "Money Market Fund Holdings" summary, which reviews the aggregate daily and weekly liquid assets, regional exposure, and maturities (WAM and WAL) for Prime and Government money market funds. It tells us, "The Investment Company Institute (ICI) reports that, as of the final Friday in September, prime money market funds held 47.2 percent of their portfolios in daily liquid assets and 62.2 percent in weekly liquid assets, while government money market funds held 75.9 percent of their portfolios in daily liquid assets and 87.0 percent in weekly liquid assets." Prime DLA was unchanged from 47.2% in August, and Prime WLA was up from 61.5%. Govt MMFs' DLA fell from 76.5% and Govt WLA decreased from 87.6% for the previous month. ICI explains, "At the end of September, prime funds had a weighted average maturity (WAM) of 29 days and a weighted average life (WAL) of 49 days. Average WAMs and WALs are asset-weighted. Government money market funds had a WAM of 43 days and a WAL of 94 days." Prime WAMs and WALs were both 2 days shorter from the previous month. Govt WAMs and WALs were both 1 day shorter from the previous month. Regarding Holdings by Region of Issuer, the release tells us, "Prime money market funds’ holdings attributable to the Americas rose from $671.02 billion in August to $740.35 billion in September. Government money market funds' holdings attributable to the Americas rose from $5,393.07 billion in August to $5,525.97 billion in September." The Prime Money Market Funds by Region of Issuer table shows Americas-related holdings at $740.4 billion, or 62.0%; Asia and Pacific at $170.7 billion, or 14.3%; Europe at $257.5 billion, or 21.5%; and, Other (including Supranational) at $26.5 billion, or 2.2%. The Government Money Market Funds by Region of Issuer table shows Americas at $5.526 trillion, or 92.2%; Asia and Pacific at $119.2 or 2.0%; Europe at $321.9 billion, 5.4%, and Other (Including Supranational) at $24.3 billion, or 0.4%.
Crane 100 MF Index Drops to 3.91%
Money fund yields (7-day, annualized, simple, net) declined by 3 bps to 3.91% on average during the week ended Friday, October 10 (as measured by our Crane 100 Money Fund Index), after falling 1 bp the week prior. Fund yields should continue to inch lower in the coming weeks as they finish digesting the Fed's Sept. 17 25 bps cut. They've declined by 115 bps since the Fed first cut in the Fed funds target rate by 50 bps on Sept. 18, 2024, and they've declined by 72 bps since the Fed cut rates by 1/4 point on 11/7/24. Yields were 3.94% on 9/30, 4.11% on 8/31, 4.12% on 7/31, 4.13% on 6/30, 4.10% on 5/31, 4.13% on 4/30/25, 4.14% on 3/31/25 and 4.28% on average on 12/31/24. MMFs averaged 4.75% on 9/30/24, 5.10% on 6/28/24, 5.14% on 3/31/24 and 5.20% on 12/31/23. The broader Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 676), shows a 7-day yield of 3.81%, down 3 bps in the week through Friday. Prime Inst money fund yields were down 2 bps at 4.03% in the latest week. Government Inst MFs were down 3 bps at 3.92%. Treasury Inst MFs were down 3 bps at 3.85%. Treasury Retail MFs currently yield 3.62%, Government Retail MFs yield 3.63% and Prime Retail MFs yield 3.82%, Tax-exempt MF 7-day yields were down 19 bps to 2.32%. Assets of money market funds rose by $9.9 billion last week to $7.758 trillion, according to Crane Data's Money Fund Intelligence Daily. MMF assets hit a record high of $7.773 trillion on October 9. Month-to-date in October (through 10/10), MMF assets have increased $50.9 billion, after increasing by $105.2 trillion in September, $132.0 billion in August, $63.7 billion in July, $6.7 billion in June, $100.9 billion in May, decreasing $24.4 billion in April, increasing by $2.8 billion in March, $94.2 billion in February, $52.8 billion in January, $110.9 billion in December, $200.5 billion in November, and $97.5 billion last October. Weighted average maturities were at 41 days for the Crane MFA and 42 days the Crane 100 Money Fund Index. According to Monday's Money Fund Intelligence Daily, with data as of Friday (10/10), 117 money funds (out of 787 total) yield under 3.0% with $146.9 billion in assets, or 1.9%; 521 funds yield between 3.00% and 3.99% ($3.989 trillion, or 51.4%), 149 funds yield between 4.0% and 4.99% ($3.623 trillion, or 46.7%) and following the recent rate cut there continue to be zero funds yielding 5.0% or more. Our Brokerage Sweep Intelligence Index, an average of FDIC-insured cash options from major brokerages, was unchanged at 0.36%, after falling 3 bps the week prior. The latest Brokerage Sweep Intelligence, with data as of October 10, shows no changes over the past week. Three of the 10 major brokerages tracked by our BSI still offer rates of 0.01% for balances of $100K (and lower tiers). These include: E*Trade, Merrill Lynch and Morgan Stanley.
BlackRock, BH Tokenize Via KAIO
A press release, "BlackRock and Brevan Howard Tokenized Funds Launch on Sei Network via KAIO's Institutional-grade Infrastructure," tells us, "KAIO, the leading fully onchain infrastructure for regulated real-world assets (RWAs), ... announced the expansion of its tokenized fund offerings to the Sei Network. Combining KAIO's institutional-grade infrastructure with the Sei Network's high-performance rails and user-centric design; will enable secure, compliant, and composable access to alternative investment products directly on-chain." KAIO COO Olivier Dang comments, "This launch marks another major milestone in institutional blockchain adoption. By using the Sei Network, we're bringing composable access to leading fund strategies entirely onchain. It's the foundation for real-time, programmable, financial infrastructure built for the next era of capital markets." The release continues, "Access to a KAIO token which holds shares in the BlackRock ICS US Dollar Liquidity Fund, one of the largest institutional money market funds, is now available onchain via KAIO's integration with the Sei Network. The KAIO token meets the growing demand for secure, low-volatility digital investment products while enabling programmability and composability in treasury operations. The launch also includes access to the Brevan Howard Master Fund alongside the fund from BlackRock." Justin Barlow, Executive Director at the Sei Development Foundation, adds, "The integration of KAIO's onchain infrastructure with the Sei Network is another important step toward the goal for Sei to become the institutional settlement layer for all digital assets. Sei's high-performance rails enable a seamless experience for trading money market funds onchain -- one that is superior to the experience of trading those funds in the real world." Finally, the release states, "These funds tokenized by KAIO can also be integrated into stablecoin architectures and other DeFi applications as collateral or as a yield-bearing reserve, thereby supporting greater transparency, liquidity, and automation in institutional blockchain finance. KAIO enables institutional investors to access this sophisticated macro fund through a secure, programmable framework that supports streamlined subscription, redemption, and reporting processes."
The Investment Company Institute's latest weekly "Money Market Fund Assets" report shows money fund assets surging higher by $19.9 billion to a record $7.385 trillion, the 3rd straight week of gains and the 11th increase in the past 12 weeks. MMFs rose $50.5 billion the prior week, after rising $31.2 billion two weeks prior. MMF assets are up by $911 billion, or 14.1%, over the past 52 weeks (through 10/8/25), with Institutional MMFs up $529 billion, or 13.7% and Retail MMFs up $381 billion, or 14.6%. Year-to-date, MMF assets are up by $535 billion, or 7.8%, with Institutional MMFs up $283 billion, or 6.9% and Retail MMFs up $252 billion, or 9.2%. ICI's weekly release says, "Total money market fund assets increased by $19.84 billion to $7.39 trillion for the week ended Wednesday, October 8, the Investment Company Institute reported.... Among taxable money market funds, government funds increased by $15.60 billion and prime funds increased by $3.00 billion. Tax-exempt money market funds increased by $1.25 billion." ICI's stats show Institutional MMFs increasing $10.1 billion and Retail MMFs increasing $9.8 billion in the latest week. Total Government MMF assets, including Treasury funds, were $6.034 trillion (81.7% of all money funds), while Total Prime MMFs were $1.211 trillion (16.4%). Tax Exempt MMFs totaled $140.6 billion (1.9%). It explains, "Assets of retail money market funds increased by $9.78 billion to $2.99 trillion. Among retail funds, government money market fund assets increased by $4.36 billion to $1.88 trillion, prime money market fund assets increased by $3.39 billion to $981.62 billion, and tax-exempt fund assets increased by $2.03 billion to $127.85 billion." Retail assets account for 40.4% of the total, and Government Retail assets make up 62.9% of all Retail MMFs. They add, "Assets of institutional money market funds increased by $10.06 billion to $4.40 trillion. Among institutional funds, government money market fund assets increased by $11.23 billion to $4.16 trillion, prime money market fund assets decreased by $391 million to $229.34 billion, and tax-exempt fund assets decreased by $780 million to $12.75 billion." Institutional assets accounted for 59.6% 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 increased by $64.4 billion in October to a record $7.772 trillion (through 10/9). Assets increased by $105.2 billion in September, $132.0 billion in August, $63.7 billion in July, $6.7 billion in June and $100.9 billion in May. They fell by $24.4 billion in April, but rose $2.8 trillion in March, $94.2 billion in February and $52.8 billion in January. They jumped $110.9 billion in December, $200.5 billion in November, and $97.5 billion last October. Note that ICI's asset totals don't include a number of funds tracked by the SEC and Crane Data, so they're almost $400 billion lower than Crane's asset series.
NY Fed Blog Explains Sponsored Repo
The NY Fed's Liberty Street Economics blog published, "The Rise of Sponsored Service for Clearing Repo." It states, "Recently instituted rule amendments have initiated a large migration of dealer-to-client Treasury repurchase trades to central clearing. To date, the main avenue used to access central clearing is Sponsored Service, a clearing product that has, until now, received little attention. This post highlights the results from a recent Staff Report which presents a deep dive into Sponsored Service. Here, we summarize the description of the institutional details of this service and its costs and benefits. We then document some basic facts on how market participants use this service, based on confidential data." The piece says, "In December 2023, the Securities and Exchange Commission (SEC) instituted rule amendments to central clearing of Treasury repurchase (repo) trades that are expected to greatly expand the number of dealer-to-client trades that are centrally cleared. How firms will comply with these rule amendments is still uncertain, but it is likely that a substantial amount of repo will be centrally cleared using the Fixed Income Clearing Corporation's (FICC) Sponsored Service offering. FICC, currently the only central counterparty for Treasury repo, offers a full suite of clearing services for its direct clearing members. For a variety of reasons, not all repo market participants want (or are eligible) to become direct clearing members, and so repo trades with these firms are not eligible for FICC's usual central clearing services (which are FICC DVP and GCF Repo; see this post for a map of U.S. repo segments). FICC's list of direct clearing members includes a wide variety of firms, but securities dealers account for a strong majority of centrally cleared trades. As such, for the purposes of this post, we characterize the direct clearing members as 'dealers.'" The post adds, "`The main benefit to dealers from engaging with sponsored repo is balance-sheet netting. This accounting benefit allows for the net value of repo positions to be reported on a dealer's balance sheet as opposed to the gross value. Netting can benefit a dealer because a smaller balance sheet typically requires holding less capital. For those dealers that are part of bank holding companies (BHCs), balance-sheet netting helps the BHC meet regulatory targets, such as the supplementary leverage ratio.... The two main groups of dealer customers that take advantage of sponsored repo are money market funds and hedge funds. Money market funds, which are looking to invest their cash holdings in short-term secured investments, dominate sponsored lending. Hedge funds dominate sponsored borrowing. The motivations for hedge funds vary across firms and time, however, a current driver of hedge fund borrowing behavior in sponsored repo is to implement a cash-futures basis trading strategy." Finally, it says, "Sponsored repo is likely to grow more important in the years ahead given the SEC's central clearing mandate for Treasury repo. In addition to the rise in activity detailed above, many dealer clients are becoming sponsored members of FICC. Between December 2020 and August 2022, FICC's list of sponsored members increased by only thirty-eight, whereas between August 2022 and July 2024, it increased by 555. In the next few years, understanding the details of sponsored repo and the trade-offs it presents relative to other forms of repo will only grow more important."
Weekly Money Fund Portfolio Holdings
Crane Data published its latest Weekly Money Fund Portfolio Holdings statistics Tuesday, which track a shifting subset of our monthly Portfolio Holdings collection. The most recent cut (with data as of October 3) includes Holdings information from 62 money funds (up 7 from a week ago), or $3.912 trillion (up from $3.709 trillion) of the $7.749 trillion in total money fund assets (or 50.5%) tracked by Crane Data. (Note: Our Weekly MFPH are e-mail only and aren't available on the website. See our latest Monthly Money Fund Portfolio Holdings here and our September 11 News, "Sept. Money Fund Portfolio Holdings: Repo Plummets, Treasuries Surge.") Our latest Weekly MFPH Composition summary shows Government assets dominating the holdings list with Treasuries totaling $1.923 trillion (up from $1.870 trillion a week ago), or 49.2%; Repurchase Agreements (Repo) totaling $1.363 trillion (up from $1.227 trillion a week ago), or 34.8%, and Government Agency securities totaling $334.3 billion (up from $296.4 billion a week ago), or 8.5%. Commercial Paper (CP) totaled $132.9 billion (down from $150.7 billion a week ago), or 3.4%. Certificates of Deposit (CDs) totaled $74.0 billion (down from $74.4 billion a week ago), or 1.9%. The Other category accounted for $48.3 billion or 1.2%, while VRDNs accounted for $36.9 billion or 0.9%. The Ten Largest Issuers in our Weekly Holdings product include: the US Treasury with $1.923 trillion (49.2% of total holdings), Fixed Income Clearing Corp with $468.6B (12.0%), the Federal Home Loan Bank with $201.2B (5.1%), JP Morgan with $120.3B (3.1%), BNP Paribas with $99.7B (2.5%), RBC with $95.5B (2.4%), Citi with $84.7B (2.2%), Federal Farm Credit Bank with $81.4B (2.1%), Wells Fargo with $69.4B (1.8%) and Barclays PLC with $54.7B (1.4%). The Ten Largest Funds tracked in our latest Weekly include: JPMorgan US Govt MM ($307.9B), Fidelity Inv MM: Govt Port ($278.7B), JPMorgan 100% US Treas MMkt ($270.7B), Goldman Sachs FS Govt ($241.3B), State Street Inst US Govt ($187.4B), BlackRock Lq FedFund ($179.8B), BlackRock Lq Treas Tr ($169.4B), Morgan Stanley Inst Liq Govt ($167.7B), Fidelity Inv MM: MM Port ($162.7B) and Dreyfus Govt Cash Mgmt ($155.4B). (Let us know if you'd like to see our latest domestic U.S. and/or "offshore" Weekly Portfolio Holdings collection and summary.)
Crane 100 MF Index Dips to 3.94%
Money fund yields (7-day, annualized, simple, net) declined by 1 bp to 3.94% on average during the week ended Friday, October 3 (as measured by our Crane 100 Money Fund Index), after falling 8 bps the week prior. Fund yields should continue to inch lower in the coming weeks as they finish digesting the Fed's Sept. 17 25 bps cut. They've declined by 112 bps since the Fed first cut in the Fed funds target rate by 50 bps on Sept. 18, 2024, and they've declined by 69 bps since the Fed cut rates by 1/4 point on 11/7/24. Yields were 3.94% on 9/30, 4.11% on 8/31, 4.12% on 7/31, 4.13% on 6/30, 4.10% on 5/31, 4.13% on 4/30/25, 4.14% on 3/31/25 and 4.28% on average on 12/31/24. MMFs averaged 4.75% on 9/30/24, 5.10% on 6/28/24, 5.14% on 3/31/24 and 5.20% on 12/31/23. The broader Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 676), shows a 7-day yield of 3.84%, down 1 bp in the week through Friday. Prime Inst money fund yields were unchanged at 4.05% in the latest week. Government Inst MFs were unchanged at 3.95%. Treasury Inst MFs were down 1 bps at 3.88%. Treasury Retail MFs currently yield 3.65%, Government Retail MFs yield 3.65% and Prime Retail MFs yield 3.84%, Tax-exempt MF 7-day yields were up 7 bps to 2.51%. Assets of money market funds rose by $18.4 billion last week to $7.749 trillion, according to Crane Data's Money Fund Intelligence Daily. MMF assets hit a record high of $7.763 trillion on October 2. Month-to-date in October (through 10/2), MMF assets have increased $41.0 billion, after increasing by $105.2 trillion in September, $132.0 billion in August, $63.7 billion in July, $6.7 billion in June, $100.9 billion in May, decreasing $24.4 billion in April, increasing by $2.8 billion in March, $94.2 billion in February, $52.8 billion in January, $110.9 billion in December, $200.5 billion in November, and $97.5 billion last October. Weighted average maturities were at 41 days for the Crane MFA and 42 days the Crane 100 Money Fund Index. According to Monday's Money Fund Intelligence Daily, with data as of Friday (10/3), 113 money funds (out of 787 total) yield under 3.0% with $140.9 billion in assets, or 1.8%; 463 funds yield between 3.00% and 3.99% ($3.416 trillion, or 44.1%), 211 funds yield between 4.0% and 4.99% ($4.191 trillion, or 54.1%) and following the recent rate cut there continue to be zero funds yielding 5.0% or more. Our Brokerage Sweep Intelligence Index, an average of FDIC-insured cash options from major brokerages, was down 3 bps at 0.36%, after falling 1 bp two weeks prior. The latest Brokerage Sweep Intelligence, with data as of October 3, shows one change over the past week. Ameriprise lowered rates for all accounts of $1K to $249K to 0.10% and for accounts of $250K to $999K to 0.25%. Three of the 10 major brokerages tracked by our BSI still offer rates of 0.01% for balances of $100K (and lower tiers). These include: `E*Trade, Merrill Lynch and Morgan Stanley.
Federated's Cunningham on MMF Lag
Federated Hermes Deborah Cunningham writes, "Slow and steady: When the Fed lowers rates, liquidity yields often decline more gradually than those in the direct market" in her latest monthly commentary. She says, "Another September rate cut and another reason to consider liquidity products. Common sense would say that when the Federal Reserve lowers its benchmark fed funds target range, as it did by a quarter percentage point two weeks ago, that interest rates and yields across the board would fall in concert. But finance doesn't always operate the way it seems it should (who isn't confused when first told that a bond's price falls when its yield rises). It is true that yields of securities in the direct market, such as government auctions, overnight trading and floating-rate securities, adjust quickly to changes in the fed funds level, now in a target range of 4-4.25%. But that's not the case for many financial products, such as mortgages and money market products. Mortgage rates key off the 10-year Treasury; money market portfolios use a 'laddered strategy.'" The brief continues, "In a falling-rate environment, 'laddered' simply means money market portfolios hold securities of different maturities bought with the higher rates available before the Fed cut. This in turn typically causes yields of these portfolios to decline slower than those found in the direct market. That can make them attractive to investors, and accounts may see inflows. It was the case last autumn and true so far this year. As of Monday, the total industry has experienced inflows of around $55 billion since the Fed action, according to iMoneyNet." Cunningham adds, "I am happy to report that ... money market fund assets [domiciled in Ireland] have passed $1 trillion, a record according to Crane Data. That's following the same pattern of growth amid falling rates. Despite the fact that the European Central Bank has taken its deposit rate to 2%, it would seem money funds are similarly becoming more attractive.... Supply and demand is another important factor in the calculation of money market yields. That's especially the case with commercial paper held by prime money funds. The amount of issuance continues to grow, largely resulting in higher yields and wider spreads above similar maturity Treasurys. And this market is becoming more diverse, with tech and manufacturing companies issuing short-term paper in addition to the bread-and-butter financial services sector. Diversification is a key element of money funds, so this is a notable development."
Funds Europe Writes on Tokenisation
Funds Europe interviews Franklin Templeton's Robert Crossley in, "Tokenisation Will Redraw the Financial Map." They comment, "As tokenisation gathers momentum across global capital markets, Robert Crossley, head of thematic research at Franklin Templeton, argues that the industry is only just beginning to grasp the transformative implications of blockchain-based finance.... 'We launched the first tokenised US '40 Act money market fund back in April 2021 -- not as a proof of concept, but as a production-grade product with real-world benefits.'" The piece states, "He sees tokenised money market funds as the vanguard. Franklin's tokenised 'Benji' fund -- initially launched in the U.S. and more recently in Luxembourg -- offers investors daily interest payments (with intraday payments soon possible), full on-chain shareholder registers, and greater flexibility around collateral use. 'These funds act as a bridge between traditional finance and decentralised digital finance,' says Crossley. 'Unlike stablecoins, which offer no interest and limited transparency, tokenised money market funds are hard, regulated assets. They're what's enabling the direct exchange of value across financial systems." It adds, "Usage of the Benji fund has been wide-ranging: from corporate treasurers seeking real-time liquidity control, to crypto exchanges using the fund as high-quality collateral, to retail investors drawn by the transparency of daily interest payments. Franklin Templeton currently has approximately $750 million in AUM across its tokenised money market offerings. Yet, Crossley is quick to note that the scale of AUM is a lagging indicator. 'Whether it's $50 or $500 billion, that tells you more about adoption than about innovation. The meaningful change is the shift in infrastructure, and that's happening beneath the surface."
OFR's Treasury Tri-party Repo Pricing
The U.S. Treasury's Office of Financial Research published a paper on "Treasury Tri-party Repo Pricing." It tells us, "The U.S. tri-party repurchase agreement (repo) market segment is a large over-the-counter venue critical for more than $2 trillion in daily funding and central bank open market operations. Using a confidential and comprehensive dataset, this paper examines the pricing of overnight tri-party repos, a key input to the U.S. Secured Overnight Financing Rate benchmark. Despite these transactions having negligible maturity, collateral, and counterparty risk, there is significant variation in the prices that market participants receive, which depend on (1) the number of counterparties they frequently trade with, (2) the degree of diversification across those counterparties, and (3) the share of trading activity those counterparties represent. Notably, during periods of market stress, these features can significantly alter the pricing impact experienced by borrowers." The paper says, "This market provides a unique venue in which a diverse set of institutions invest their cash and obtain large amounts of funding on a daily basis. Beyond its important funding role, this market plays a critical function in U.S. monetary policy as it is used by the Federal Reserve (Fed) to influence rates through open market operations. Overnight transactions collateralized with U.S Treasuries, or overnight tri-party repos, are also important as their rates serve as a key input to the Secured Overnight Financing Rate (SOFR). Despite its significance, pricing in this market remains imperfectly understood, largely due to the absence of publicly available disaggregated data. By leveraging a confidential, comprehensive transaction-level dataset, we aim to fill this gap by empirically studying how frictions in this market can alter tri-party repo pricing." The piece adds, "The bilateral nature of repos means that participants privately negotiate terms, each with partial knowledge about the terms available to others. As a result, prices can be influenced by participants' private information, preferences, and alternative trading opportunities. Also, because repos resemble collateralized loans, factors such as collateral, loan maturity, and counterparty risk can affect prices. To remove the impact of as many factors as possible, we deliberately focus on overnight Treasury tri-party repos where considerations about maturity, collateral, and counterparty risk are likely to be negligible."
Paper Takes Aim at Tax-Exempt MMFs
A new paper titled, "When Complexity Excuses Enforcement: The Regulatory Gap in Tax-Exempt Money Market Fund Disclosure of Municipal VRDO Deemed Reissuances," written by Michael Lissack of Tongji University, says, "This Article exposes the most egregious enforcement asymmetry in modern securities regulation: while state attorneys general and federal prosecutors pursue remarketing agents for systematic Variable Rate Demand Obligation (VRDO) manipulation through record settlements and ongoing litigation, money market fund managers whose shareholders directly profited from these violations have entirely escaped regulatory accountability. Despite collecting billions in management fees on artificially enhanced returns generated by systematic violations, fund managers have systematically concealed obvious deemed reissuance risks from investors while regulatory authorities pursue zero enforcement actions." The summary continues, "Justice Andrew Borrok's April 2025 decision in State of New York ex rel. Edelweiss Fund LLC v. JPMorgan Chase & Co. eliminates all remaining excuses for this enforcement failure. The court found substantial evidence that remarketing agents' systematic 'bucketing' practices operated outside disclosed parameters -- establishing the prerequisite condition that, when combined with interest rate changes of 25 basis points or more under Treas. Reg. § 1.1001-3, would trigger deemed reissuances affecting the tax-exempt status of fund distributions. This judicial validation, combined with current market volatility creating mathematical certainty of ongoing Treasury Regulation threshold breaches, makes continued regulatory inaction toward money market fund managers a dereliction of investor protection duties." It adds, "The Article establishes that regulatory authorities can no longer justify enforcement asymmetry that protects primary beneficiaries while pursuing only those who implemented violations. The evidence is overwhelming, the judicial validation of undisclosed practices is explicit, and current violations are mathematically demonstrable when these practices combine with documented rate movements. The time for regulatory complexity excuses has ended."
