Money Fund Yields Bottom at 4.18%
Money fund yields (7-day, annualized, simple, net) fell by just one basis point to 4.18% on average during the week ended Friday, Jan. 17 (as measured by our Crane 100 Money Fund Index), after falling 6 bps the week prior and 2 bps two weeks prior. Fund yields have digested almost all of the Federal Reserve's 25 basis point cut from December 18, though they may inch down a basis point or 2 lower in coming days. They've declined by 88 bps since the Fed first cut its Fed funds target rate by 50 bps percent on Sept. 18, and they've declined by 45 bps since the Fed cut rates by 1/4 point on 11/7. Yields were 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. The broader Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 678), shows a 7-day yield of 4.09%, down 1 bp in the week through Friday. Prime Inst money fund yields were down 1 bp at 4.29% in the latest week. Government Inst MFs were down 1 bp at 4.19%. Treasury Inst MFs were down 1 bp at 4.14%. Treasury Retail MFs currently yield 3.92%, Government Retail MFs yield 3.88%, and Prime Retail MFs yield 4.08%, Tax-exempt MF 7-day yields were unchanged at 1.80%. Assets of money market funds fell by $47.2 billion last week to $7.183 trillion, according to Crane Data's Money Fund Intelligence Daily. For the month of January, MMF assets have jumped by $8.9 billion, after increasing by $110.9 billion in December, $200.5 billion in November, $97.5 billion in October and $149.8 billion in September. Weighted average maturities were unchanged at 38 days for both the Crane MFA and the Crane 100 Money Fund Index. According to Monday's Money Fund Intelligence Daily, with data as of Friday (1/17), 115 money funds (out of 790 total) yield under 3.0% with $140.3 billion in assets, or 2.0%; 188 funds yield between 3.00% and 3.99% ($683.6 billion, or 9.5%), 487 funds yield between 4.0% and 4.99% ($6.359 trillion, or 88.5%) and following the recent rate cut there continue 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 up 1 bp to 0.41%, after dropping 3 bps the week prior. The latest Brokerage Sweep Intelligence, with data as of Jan. 17, shows one change over the past week. RW Baird raised rates to 1.45% for accounts between $1 and $999K, to 2.24% for accounts of $1M to $1.9M, and to 2.89% for accounts of $5M or more. 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.
