Money Fund Yields Down to 4.41%
Money fund yields declined by 2 basis point to 4.41% on average during the week ended Friday, Dec. 13 (as measured by our Crane 100 Money Fund Index), after falling 1 bp the week prior and 1 bp two weeks prior. Yields reflect almost all of the Federal Reserve's 25 basis point cut on November 7, and they should move lower again following the Fed's Dec. 18 meeting (if the Fed cuts as expected). They've declined by 65 bps since the Fed cut its Fed funds target rate by 50 bps percent on Sept. 18 and they've declined by 22 bps since the Fed cut rates by 1/4 point on 11/7. Yields were 4.65% on average on 10/31, 4.75% on 9/30, 5.10% on 8/31, 5.13% on 7/31 and 6/28, 5.14% on 5/31, 5.13% on 4/30, 5.14% on 3/31 and 2/29/24, 5.17% on 1/31/24, and 5.20% on 12/31/23. The broader Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 678), shows a 7-day yield of 4.31%, down 2 bps in the week through Friday. Prime Inst money fund yields were down 1 bps at 4.53% in the latest week. Government Inst MFs were down 2 bps at 4.42%. Treasury Inst MFs were down 3 bps at 4.34%. Treasury Retail MFs currently yield 4.13%, Government Retail MFs yield 4.12%, and Prime Retail MFs yield 4.32%, Tax-exempt MF 7-day yields were up 17 bps to 2.22%. Assets of money market funds fell by $28.1 billion last week to $7.079 trillion, decreasing after seeing a new record high on 12/5 at $7.124 trillion, according to Crane Data's Money Fund Intelligence Daily. For the month of December, MMF assets have jumped by $16.0 billion, after increasing by $200.5 billion in November, $97.5 billion in October and $149.8 billion in September. Weighted average maturities were up 1 bp at 37 days for the Crane MFA and up 1 bp at 38 days for the Crane 100 Money Fund Index. According to Monday's Money Fund Intelligence Daily, with data as of Friday (12/13), 113 money funds (out of 790 total) yield under 3.0% with $137.4 billion in assets, or 1.9%; 84 funds yield between 3.00% and 3.99% ($78.7 billion, or 1.1%), 593 funds yield between 4.0% and 4.99% ($6.863 trillion, or 96.9%) and following the recent rate cut there continues 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 0.46%, after dropping 2 basis points four weeks prior. The latest Brokerage Sweep Intelligence, with data as of Dec. 13, shows that there was one change over the past week. Merrill Lynch lowered rates once again for their advisory accounts; they're now at 4.42% (down 3 bps from the week prior). 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.
