Bloomberg writes on the opposite view of our News today in, "Fed Rate Cuts to Spur $​2 Trillion Money-​Fund Exit, Apollo'​s Slok Says." They state, "The steady stampede into money-​market funds is likely to reverse as the Federal Reserve keeps pushing down interest rates, giving investors incentive to shift cash into higher-​yielding assets, according to Apollo Global Management'​s chief economist Torsten Slok. '​Where will the $​2 trillion added to money market accounts go now that the Fed is cutting,' Slok wrote in a note to clients on Tuesday, citing the inflow to money-​market funds since the Fed began raising rates in March 2022." He says, "The most likely scenario is that money will leave money market accounts and flow into higher-​yielding assets such as credit, including investment grade private credit." Bloomberg comments, "Slok, who warned of a such an exodus earlier this year, has stuck to his call even after investors keep piling in. The assets of such funds swelled last week to $​7 trillion for the first time ever, defying speculation that investors would pull out cash once the Fed started nudging interest rates down from a more than two-​decade high. The persistence of inflows even after the Fed cut rates at the last two meetings likely reflects the fact that money-​market funds tend to be slower than banks in reducing the payouts to investors." They add, "The seven-​day yield on the Crane 100 Money Fund Index, which tracks the 100 largest funds, was 4.​46% as of Nov. 18, just below the lower bound of the federal funds rate."

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