ICI's money fund asset series shows a decrease of $7.2 billion to $3.498 trillion in the latest week, which breaks an unprecedented 14-week streak of inflows. Money funds normally see outflows at month-end, and these were exacerbated by a sharp rebound in repo and Treasury rates on March 31. Retail assets increased by $5.9 billion to a record $1.268 trillion, while Institutional assets decreased by $13.1 billion to $2.231 trillion.

Money funds should see inflows return temporarily next week, then tax-related outflows should send assets lower following April 15. Year-to-date, money fund assets have increased by $354 billion, or 11.3%. Over the past 52 weeks, money fund assets have increased by $1.048 trillion, or 42.8%. While we expect inflows to resume, a recovery in the broader stock and bond markets, and reduced expectations of additional interest rate cuts, should slow the growth of money funds going forward.

Year-to-date, Government money funds have grown at 3 times the rate of Prime money funds, though both sectors saw outflows this week on the Institutional side. Tax-exempt money funds have begun attracting inflows. Retail tax-exempt money funds rose $2.3 billion and institutional tax-exempt money fund assets rose by $2.8 billion.

Over the past week, our Crane 100 Money Fund Index rose by 4 basis points to 2.78%. Month-end rate pressures and a sharp rebound in Treasury and government yields temporarily delayed the impact of the Fed's 75 basis point rate cut. Yields should resume their declines next week, though it the odds of further rate cuts have been severely discounted of late. Tax-free money fund yields rose by 7 basis points to 2.46%.

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