Wells Funds Symposium Recap
Wells Fargo Funds writes about our recent Money Fund Symposium in their latest "Portfolio Manager Commentary." THey tell us, "June was a fairly active month in money market land, with two events seemingly capturing the attention of most inhabitants. First, the Federal Open Market Committee (FOMC) met on June 14 and 15 and, in a move that surprised no one, raised the federal funds target range by 25 basis points (bps; 100 bps equal 1.00%). Federal Reserve (Fed) Chair Janet Yellen held a press conference at which she reiterated the Fed's commitment to normalizing interest rates as economic conditions warranted.... Fortunately for industry participants, Crane Data scheduled its annual Money Fund Symposium for the third week of the month. This is the largest gathering of money market professionals in the industry and affords participants the opportunity to discuss industry trends, including the impact of the Fed on markets. With money market reform firmly in the rearview mirror, focus turned to the current situation and the future landscape of the industry. One emergent theme from the conference was that given the sector rotation prompted by money market reform, the Fed and the looming congressional fight over the debt ceiling are likely to be front and center in market discussions as well as market influence this year." They add, "Over the past few months, we've discussed the potential for the Fed to let some of its balance sheet roll off by reducing the ongoing reinvestment of its System Open Market Account portfolio maturities. We noted that clarity about methods and timing might be hard to find until at least July 5, when the minutes of the Fed's June 14 meeting are due to be released. It appears this is at least one curve the Fed is staying in front of, as it surprised by addressing how to end reinvestments in a supplement to its June meeting statement. The when has been narrowed down to this year."
