Wells Fargo Money Market Funds' latest "Overview, strategy, and outlook" tells us, "The hawkish lean that came out of the mid-June Federal Reserve (Fed) meeting, discussed in greater detail in the prime section below, drew a lot of attention, but the result that was least important to most observers was the most important to the money markets: the Fed's 5-basis-poin ... tweak higher to its administered rates. The Fed moved its reverse repurchase agreement (RRP) rate from 0.00% to 0.05% and its interest on excess reserves rate from 0.10% to 0.15%. In the process, it threw a lifeline to short-term investors who were faced with investing more and more of their cash at a zero yield. We had noted the increasingly dire conditions in the money markets in our past few commentaries, with Treasury bill (T-bill) supply falling, the Treasury's cash balance shrinking, and usage of the Fed's RRP facility leaping to new records each week." They write, "In the previous period of regular RRP usage from 2013 to 2018, during which rates were first set at zero before limping ahead in a gentle liftoff, usage rarely exceeded $200 billion per day except for quarter-end reporting dates, which saw bumps as high as $474 billion. Before May 2021, RRP usage had topped $400 billion only four times.... In June 2021, the lowest amount taken was $438 billion on June 3, the average for the month was $642 billion, and usage peaked at $992 billion on June 30. The vast sums placed with the Fed through the RRP represent the excess of demand over supply in the space and bode ill for the near-term outlook. The extra cash waiting to be deployed will be quickly put to work on anything that yields more than 0.05%, making 0.05% not just the Fed's floor but also the general level for short-term government investments." Wells' PMs add, "To summarize, while the bad news is that rates are pinned to the RRP level, the good news is they're pinned at 0.05% instead of zero. Call the outlook 'dire plus 5 bps.'"

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