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U.S. Money-Market Fund Assets Surge $160 Billion to Record $6.47 Trillion After 50 Basis Points Fed Rate Cut

Oct 10, 2024, 07:33 PM

Investors in U.S. mutual funds and exchange-traded funds (ETFs) are increasingly adopting a strategy of 'Don't fight the Fed' following the Federal Reserve's recent interest rate cut. In the two weeks since the Fed's decision to lower rates by 50 basis points, investors have replenished all the equity capital they withdrew in the three weeks prior to the meeting. Concurrently, assets in money-market funds have surged by approximately $160 billion, reaching a record total of $6.47 trillion. This influx reflects a growing preference for higher yields amid the Fed's easing monetary policy, marking a significant shift in investor behavior as they seek safer returns.