Money market mutual funds saw asset inflows for the third week in a row, the first time this has happened since early 2009. While it's too early to declare the outflows over, it's clear that the tide has turned. Flows into bank deposits and bond funds have slowed to almost zero and in some cases have reversed. Since April 2010, money fund assets have declined by less than both bank savings and CDs as money funds plateau at $2.8 trillion and bank deposits decline from their $5.1 trillion peak.
ICI's latest weekly "Money Market Mutual Fund Assets" statistics say, "Total money market mutual fund assets increased by $3.53 billion to $2.822 trillion for the week ended Wednesday, August 11, the Investment Company Institute reported today. Taxable government funds increased by $3.34 billion, taxable non-government funds increased by $4.00 billion, and tax-exempt funds decreased by $3.81 billion."
Since the end of April 2010, money fund assets have declined by a mere $50 billion, or 1.7%, according to ICI's weekly stats. Institutional assets, which led the outflows in the first four months of 2010, have even rebounded slightly as retail outflows have slowed to a trickle. While money fund rates have climbed since bottoming out in January and February of 2010, market rates have been declining. This has pushed cash from direct instruments back into money funds.
Looking at The Federal Reserve's "H.6 Money Stock Measures", we see Savings deposits (including MMDAs, or money market deposit accounts) falling by $46.1 billion over the past 4 weeks (through Aug. 2), after rising by $589 billion the past 52 weeks. `After breaking the $5.0 trillion level in March and peaking at $5.164 in the first week of June, deposits appear to have stalled. Regulatory and market pressures continue to weigh upon institutional and retail deposit rates.
