The Federal Reserve released its "Minutes of the Federal Open Market Committee, January 31-February 1, 2017" yesterday, which mentioned money market funds in a couple of spots. It says, "In money markets, interest rates smoothly shifted higher following the Committee's decision at its December meeting to increase the target range for the federal funds rate by 25 basis points, and federal funds subsequently traded near the center of the new range except on yearend. Although year-end pressures in U.S. money markets were similar to past quarter-ends, some notable, albeit temporary, strains appeared over the turn of the year in foreign exchange swap markets and European markets for repurchase agreements.... The Open Market Desk's surveys of dealers and market participants pointed to some change in expectations for FOMC reinvestment policy, with more respondents than in previous surveys anticipating a change in policy when the federal funds rate reaches 1 to 1 1/2 percent. The higher level of take-up at the System's overnight reverse repurchase agreement facility that developed following the implementation of money market fund reform last fall generally persisted." It adds, "Money market rates responded as expected to the change in the target range for the federal funds rate. The effective federal funds rate was 66 basis points -- 25 basis points higher than previously -- every day following the change, except at year-end. Conditions in other domestic short-term funding markets were generally stable over the intermeeting period. Assets under management by money market funds changed little, with government funds experiencing modest net outflows and prime fund assets remaining about flat.... The staff provided its latest report on potential risks to financial stability, indicating that it continued to judge the vulnerabilities of the U.S. financial system as moderate on balance.... [W]ith money market fund reforms in place, the vulnerabilities from maturity and liquidity transformation were viewed as being somewhat below their longer-run average." The Fed also says, "In discussing the outlook for monetary policy over the period ahead, many participants expressed the view that it might be appropriate to raise the federal funds rate again fairly soon if incoming information on the labor market and inflation was in line with or stronger than their current expectations or if the risks of overshooting the Committee’s maximum-employment and inflation objectives increased."

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