MMF Assets Dip Below $2.7T
The Investment Company Institute released its latest weekly "Money Market Mutual Fund Assets," report, which shows money fund assets dropping for the 5th week in a row and falling below $2.7 trillion for the first time since mid-December 2014. ICI's weekly says, "Total money market fund assets decreased by $16.35 billion to $2.69 trillion for the week ended Wednesday, February 4, the Investment Company Institute reported today. Among taxable money market funds, Treasury funds (including agency and repo) decreased by $1.55 billion and prime funds decreased by $15.82 billion. Tax-exempt money market funds increased by $1.03 billion." Year-to-date through 2/4, money fund assets have declined by $47B, or 1.7%. ICI explains, "Assets of retail money market funds decreased by $3.41 billion to $899.48 billion. Among retail funds, Treasury money market fund assets decreased by $710 million to $197.05 billion, prime money market fund assets decreased by $2.96 billion to $512.94 billion, and tax-exempt fund assets increased by $260 million to $189.49 billion. Assets of institutional money market funds decreased by $12.94 billion to $1.79 trillion. Among institutional funds, Treasury money market fund assets decreased by $850 million to $786.56 billion, prime money market fund assets decreased by $12.86 billion to $926.67 billion, and tax-exempt fund assets increased by $770 million to $72.75 billion." In other news, today's Wall Street Journal features, "Money Markets May Keep the Squeeze on Banks." It says, "For banks, the great compression may get worse before it gets better. After years of unremitting complaints that persistently low interest rates are squeezing profits out of the banking system, hopes are high that a change in U.S. monetary policy later this year could finally provide some relief. Now a change under way in the money-market fund industry has cast a shadow of doubt over this. Fidelity Investments announced plans last week to convert Fidelity Cash Reserves, the largest U.S. prime money-market fund, to a government-only fund."
