Money Market News
Money fund yields (7-day, annualized, simple, net) increased by two basis points to 4.12% on average during the week ended Friday, May 30 (as measured by our Crane 100 Money Fund Index), after declining by one basis point the previous week. Fund yields should stay relatively flat until the Fed moves rates again later this year. They've declined by 94 bps since the Fed first cut its Fed funds target rate by 50 bps on Sept. 18, 2024, and they've declined by 51 bps since the Fed last cut rates by 1/4 point on 11/7/24. Yields were 4.13% on 4/30/25, 4.14% on 3/31/25, 4.16% on 2/28/25, 4.19% on 1/31/25, 4.28% on average on 12/31/24, 4.45% on 11/30/24, 4.65% on 10/31, 4.75% on 9/30, 5.10% on 8/31, 5.13% on 7/31 and 6/28, 5.14% on 3/31 and 5.20% on 12/31/23. (Note: Register ASAP for our upcoming Crane's Money Fund Symposium, which is in just 3 weeks -- June 23-25 -- in Boston!)
Dreyfus posted a brief titled, "Moody's Downgrade of US Long-Term Ratings," which states, "On May 16, Moody's Corporation downgraded the United States of America's long-term issuer and senior unsecured ratings to Aa1 from Aaa. Moody's released a statement on the downgrade, noting 'This one-notch downgrade on our 21-notch rating scale reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns.'" (Note: Register ASAP for our upcoming Crane's Money Fund Symposium, which is in just 3 weeks -- June 23-25 -- in Boston!)
ICI published its latest weekly "Money Market Fund Assets" report, as well as its latest monthly "Trends in Mutual Fund Investing - April 2025" and "Month-End Portfolio Holdings of Taxable Money Funds" on Thursday. The weekly series shows money fund assets falling $19.8 billion to $6.949 trillion, after rising $27.7 billion the week prior. Money fund assets remain just below record levels; they've increased by $645.3 billion (or 10.2%) since the Fed last cut rates on 9/18/24 and increasing by $971.4 billion (or 16.3%) since 4/24/24. MMF assets are up by $879 billion, or 14.5%, in the past 52 weeks (through 5/28/25), with Institutional MMFs up $443 billion, or 12.2% and Retail MMFs up $437 billion, or 17.9%. Year-to-date, MMF assets are up by just $98 billion, or 1.4%, with Institutional MMFs down $37 billion, or -0.9% and Retail MMFs up $135 billion, or 4.9%. (Note: Register and make hotel reservations soon for our upcoming Crane's Money Fund Symposium, which is June 23-25. We hope to see you next month in Boston!)
Crane Data published its latest Weekly Money Fund Portfolio Holdings statistics Wednesday, which track a shifting subset of our monthly Portfolio Holdings collection. The most recent cut (with data as of May 23) includes Holdings information from 69 money funds (up 7 from a week ago), or $3.904 trillion (up from $3.623 trillion) of the $7.314 trillion in total money fund assets (or 53.4%) 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 May 12 News, "May Money Fund Portfolio Holdings: FICC Repo Hits $1T, T-Bills Drop.")
The Financial Times published an article titled, "EU plans sweeping stress test of non-banks," which tells us, "European Union (EU) regulators are planning their first stress test to look for vulnerabilities in the financial system outside of banks, reflecting fears about the rapid growth of less regulated groups such as hedge funds and private equity. The plans by European authorities to examine the impact on the wider financial system of a potential market crisis, which would also include pension funds and insurers, follow a similar debut exercise by the Bank of England last year." (Note: We recently changed the dates for our next European Money Fund Symposium; it is now scheduled for Sept. 22-23, 2025, in Dublin, Ireland. We also hope to see many of you next month at our big show, Money Fund Symposium, which is June 23-25 in Boston.)
The U.S. Securities and Exchange Commission published its latest monthly "Money Market Fund Statistics" summary, which shows that total money fund assets fell by $17.0 billion in April 2025 to $7.374 trillion, after hitting a record $7.391 trillion the previous month. The SEC shows Prime MMFs increased $2.4 billion in April to $1.258 trillion, Govt & Treasury funds decreased $24.7 billion to $5.969 trillion and Tax Exempt funds increased $5.3 billion to $147.0 billion. Taxable yields continued to decline in April after previous decreases in March, February and January. The SEC's Division of Investment Management summarizes monthly Form N-MFP data and includes asset totals and averages for yields, liquidity levels, WAMs, WALs, holdings, and other money market fund trends. We review their latest numbers below. (Our MFI XLS monthly shows money fund assets falling $15.5 billion in April 2025, after a record $7.333 trillion in March. In May month-to-date through 5/21, total money fund assets have increased by $56.3 billion to $7.356 trillion, according to Crane Data's separate, and slightly smaller, MFI Daily series.)
ICI published its latest weekly "Money Market Fund Assets" report Thursday. The weekly series shows money fund assets rising $27.7 billion to $6.969 trillion, after falling $5.0 billion the week prior and rising $37.6 billion two weeks ago. Money fund assets remain just below record levels and have still risen in 27 of the last 42, and 38 of the last 57 weeks, increasing by $665.1 billion (or 10.6%) since the Fed cut on 9/18/24 and increasing by $991.2 billion (or 16.6%) since 4/24/24. MMF assets are up by $903 billion, or 14.9%, in the past 52 weeks (through 5/21/25), with Institutional MMFs up $463 billion, or 12.7% and Retail MMFs up $440 billion, or 18.1%. Year-to-date, MMF assets are up by just $118 billion, or 1.7%, with Institutional MMFs down $18 billion, or -0.4% and Retail MMFs up $137 billion, or 5.0%. (Note: Register soon for our upcoming Crane's Money Fund Symposium, which is June 23-25. We hope to see you next month in Boston!)
Fitch Ratings published "U.S. Local Government Investment Pools Monitor: 1Q25," which states, "Fitch Ratings' two local government investment pool (LGIP) indices reported an aggregate asset increase in the first quarter of 2025 (1Q25) driven by Liquidity LGIPs, consistent with seasonal flow trends. Total assets for the Fitch Liquidity LGIP Index and the Fitch Short-Term LGIP Index reached $655.5 billion at quarter end, marking increases of $9.3 billion qoq and $40.5 billion yoy. (Fitch's tables shows the Liquidity LGIP total at just $430.7 billion and the Short-Term LGIP total at $224.8 billion.) The Fitch Liquidity LGIP Index rose by 2.3% qoq while the Fitch Short-Term LGIP Index fell by 0.2% qoq. These changes contrast with an average increase of 6.2% and average decrease of 1.8%, respectively, during the first quarter over the past three years."
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 May 16) includes Holdings information from 62 money funds (unchanged from two weeks ago), or $3.623 trillion (down from $3.633 trillion) of the $7.325 trillion in total money fund assets (or 49.5%) 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 May 12 News, "May Money Fund Portfolio Holdings: FICC Repo Hits $1T, T-Bills Drop.")
Federal Reserve Bank of Dallas President Lorie Logan hosted a panel on "The Increasing Role of Nonbank Institutions in the Treasury and Money Markets" at the Federal Reserve Bank of Atlanta 2025 Financial Markets Conference. The panel featured Lou Crandall of Wrightson ICAP, Deirdre Dunn of Citigroup Global Markets and chair of the Treasury Borrowing Advisory Committee, and Nate Wuerffel of BNY. In Logan's "Opening remarks," she comments, "Our topic this afternoon is a timely one: the role of nonbank financial institutions (NBFIs) in Treasury and money markets.... The Treasury market and money markets sit at the very core of the financial system. The Treasury market finances the U.S. government, provides a safe and liquid asset relied on by investors worldwide, and creates a benchmark for broader long-term interest rates. Money markets establish overnight risk-free interest rates that are building blocks for all other asset prices, they keep credit flowing through the economy by financing a wide range of assets, and they are where the Fed implements the stance of monetary policy. And these markets are tightly linked because one of the main money markets is the repo market, where Treasury securities are financed."
Stradley Ronon Partner Jamie Gershkow and Associate Geena Marzouca recently published an article in The Investment Lawyer titled, "Are We Trying to Kill Institutional Prime Funds? -- Money Market Funds in a Post Reform Era." The two explain, "At a meeting of the US Securities and Exchange Commission (SEC) adopting significant reforms to money market fund regulation, Commissioner Peirce posed a pointed question: Are we trying to kill institutional prime funds? With the `final compliance date for money market fund reform behind us, this article looks at whether Commissioner Peirce's concern became reality and assesses the overall impact of the reforms on the money market fund industry. This article reviews considerations related to the implementation of certain aspects of the reforms, including liquidity fees, share cancellation, increased liquidity requirements and stress testing, and board oversight of money market funds under amended Rule 2a-7 of the Investment Company Act of 1940 (1940 Act)."
S&P Global Ratings published "U.S. Domestic 'AAAm' Money Market Fund Trends (First-Quarter 2025)" recently, which tells us, "Rated MMF assets were stable quarter over quarter. Government and prime MMFs experienced modest growth early in the year, which was partially related to institutional investors building up cash amid the uncertainty around the U.S. administration's policies. Near the end of the first quarter, rated MMFs saw outflows in line with seasonal patterns. We expect that MMF assets will experience limited growth until the tax season settles."
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