"Money-Market Yields Struggle to Stay Positive" writes SmartMoney, saying, "Money-market mutual funds are typically about as low risk as an investment can get. That's why many people use these funds, consisting primarily of U.S. Treasurys and other super-safe short-term debt, as a parking place for cash. But these aren't typical times. The benchmark federal-funds rate, the target the Fed sets on rates for overnight loans between member banks, is currently at 1%. Keep in mind that's a target. The effective rate, calculated daily, is now pushing 0%, the lowest it's been since the 1950s. Meanwhile, fearful investors hoping to preserve capital rather than grow it have been pouring into Treasury bills, pushing those yields into zero territory. The result? Since yields on taxable money funds are closely tied to the Fed's benchmark rate and many money funds hold Treasurys, yields on hundreds of money funds are dangerously close to going negative."
