Federated Investors' latest "Month in Cash: Numbers game at the Fed" tells us, "The more pressing Fed issue is this month'​s FOMC meeting. The markets think there is more than a 90% chance of a 25-​basis-​point hike, with a little over 60% likelihood of another in December. So, the market is expecting continued increases which, at 2.​25-​2.​50% at the end of this year, would take us close to the Fed'​s neutral target of 2.​9%. The markets still don'​t know what will happen with the balance sheet in 2019. There has been no guidance yet on that, which is frustrating. I expected some two meetings ago." Money market CIO Deborah Cunningham writes, "The weighted average maturity (​WAM) of our government funds was very short in August. It was simply due to the relative attractiveness of yields on short-​term instruments. Why go out the curve when you can get the same rate with less duration. We think the market wasn'​t pricing in a September move adequately until the last week of the month.... Speaking of new issuance, early last month we jumped on the chance to participate in the first sale of a security tied to the new Secured Overnight Financing Rate (​SOFR) index, the one most likely to replace the London interbank offered rate (​Libor). These were Fannie Mae instruments. Then in mid-​August, our prime funds purchased asset-​backed and financial commercial paper floaters priced with SOFR. Their spreads above overnight yields were attractive; it pays to be an early adopter." Finally, she says, "The WAM ranges for our funds were: 25-​35 days for government, 25-​35 for municipal and 30-​40 for prime. Libor was essentially unchanged over the month, with 1-​month at 2.​08%, 3-​month at 2.​32% and 6-​month at 2.​53%."

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