Federated's "Month in Cash: Light at the end of the tunnel" says, "In a month that saw continued albeit choppy economic improvement, the most significant news in August from the money market's perspective emanated from an event that actually occurred in July. That's when Federal Reserve policymakers wrapped up their latest meeting, the minutes of which weren't released until Aug. 21. Notable in the Federal Open Market Committee (FOMC) comments were two things: committee members appeared wedded to finalizing a framework for ending quantitative easing (QE) when they next meet on Sept. 17-18, with a tapering of the $85 billion in monthly Treasury and agency mortgage-backed securities purchases likely starting in October. Secondly, and more significantly from our viewpoint, the minutes indicated policymakers expect to use overnight reverse repos to help manage the Fed's exit from its extraordinary monetary accommodation of the past five years. What does this mean for savers and money fund investors? After living with extremely low interest rates since 2008, some relief may loom on the not-too-distant horizon. To be sure, events between now and the September meeting could forestall immediate movement by the FOMC. Fed Chairman Ben Bernanke et al have made clear that whatever decisions they make will be driven by the data, the bulk of which so far is suggesting the economy is strong enough to stand on its own.... Still, with housing off the floor, unemployment trending down and the consumer pretty well situated, the Fed appears set to act sooner rather than later."

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