Crane Data Subscribers
Benchmark Crane 100 Money Fund Index Falls 0.27 Percent in Week. Money market mutual fund yields plunged this week, falling 27 basis points, from 4.32% to 4.05% from Friday, January 18 through Jan. 25, according to the benchmark Crane 100 Money Fund Index. Yields should continue moving sharply lower in the coming week as the money markets digest the remainder of the Federal Reserve's surprise 75 bps rate cut Jan. 22, and as cash markets anticipate a possible further 1/4- or 1/2-point rate cut by the Fed Jan. 30. The top-yielding funds also dropped this week -- No. 1 Institutional fund Reserve Primary fell from 4.87% to 4.74% and former No. 1 Russell MMF S fell from 4.89% to 4.71%, while Individual fund leader Fidelity Cash Reserves fell from 4.62% to 4.46%. Bank money market deposit accounts and brokerage sweep rates also plummeted, with No. 1 Countrywide Savings cutting its rate from 5.11% to 4.88%. Other banks also reduced rates sharply (see Bank Deals "The Plummeting Savings Accounts and CD Rates"). The Federal Reserve began reducing its bellwether Fed funds target rate from 5.25% on Sept. 18, 2007 to its current 3.50% level. Back in mid-September, our Crane 100 Index, an average 7-day yield of the 100 largest money market mutual funds, was yielding 5.06%.
