Money Fund Yields Drop 5 Bps to 4.34%
Money fund yields (7-day annualized) fell by 7 basis point to 4.34% on average during the week ended Friday, Dec. 20 (as measured by our Crane 100 Money Fund Index), after falling 2 bps the week prior and 1 bp two weeks prior. Yields are just beginning to reflect the Federal Reserve's 25 basis point cut on December 18, so they should continue to move lower in the coming days. They've declined by 72 bps since the Fed first cut its Fed funds target rate by 50 bps percent on Sept. 18, and by 29 bps since the Fed cut rates by 1/4 point on 11/7. Yields were 4.45% on 11/30, 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 3/31 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 4.24%, down 7 bps in the week through Friday. Prime Inst money fund yields were down 9 bps at 4.44% in the latest week. Government Inst MFs were down 7 bps at 4.35%. Treasury Inst MFs were down 6 bps at 4.28%. Treasury Retail MFs currently yield 4.07%, Government Retail MFs yield 4.05%, and Prime Retail MFs yield 4.24%, Tax-exempt MF 7-day yields were up 75 bps to 2.97%. Assets of money market funds rose by $5.8 billion last week to $7.085 trillion, slowly rebounding after seeing a decrease following the 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 $21.9 billion, after increasing by $200.5 billion in November, $97.5 billion in October and $149.8 billion in September. Weighted average maturities were unchanged at 37 days for the Crane MFA and 38 days for the Crane 100 Money Fund Index. According to Monday's Money Fund Intelligence Daily, with data as of Friday (12/20), 59 money funds (out of 790 total) yield under 3.0% with $36.2 billion in assets, or 0.5%; 164 funds yield between 3.00% and 3.99% ($233.9 billion, or 3.3%), 567 funds yield between 4.0% and 4.99% ($6.815 trillion, or 96.2%) 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 down 2 bps at 0.44%, after dropping 2 basis points five weeks prior. The latest Brokerage Sweep Intelligence, with data as of Dec. 20, shows three changes over the past week. Fidelity lowered rates to 2.19% for all accounts and Schwab lowered rates to 0.05% for all accounts. Merrill Lynch lowered rates once again for their advisory accounts; they're now at 4.40% (down 2 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.
