Crane Money Fund Index Up to 2.10%; Euro Money Fund Yield Average Turns Positive

Sep 20 22

Money fund yields continued creeping higher again in the latest week, with our Crane 100 Money Fund Index (7-Day Yield) rising 5 basis points to 2.10% in the week ended Friday, 9/16. Yields rose by 3 basis points the previous week, 3 bps the week before that, and 2 basis points the week before that. On average, they're up from 1.57% on July 29, up from 1.18% on June 30 and more than triple their level of 0.58% on May 31. MMF yields are up from 0.21% on April 29, 0.15% on March 31 and 0.02% on February 28 (where they'd been for almost 2 years prior). Yields should jump again following the Fed's Wednesday (9/21) meeting, when they're expected to hike rates by another 75 bps. Our broader Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 679), shows a 7-day yield of 2.01%, up 7 bps in the week through Friday. The Crane Money Fund Average is up 98 bps since beginning of July and up 154 bps from 0.47% at the beginning of June. Prime Inst MFs were up 4 bps to 2.19% in the latest week, up 92 bps since the start of July and up 155 bps since the start of June (close to double from the month prior). Government Inst MFs rose by 8 bps to 2.05%, they are up 95 bps since start of July and up 151 bps since the start of June. Treasury Inst MFs up 7 bps for the week at 2.07%, up 103 bps since beginning of July and up 157 bps since the beginning of June. Treasury Retail MFs currently yield 1.82%, (up 6 bps for the week, up 102 bps since July and up 152 bps since June), Government Retail MFs yield 1.77% (up 10 bps for the week, up 98 bps since July started and up 151 bps since June started), and Prime Retail MFs yield 2.04% (up 4 bps for the week, up 97 bps from beginning of July and up 156 bps from beginning of June), Tax-exempt MF 7-day yields rose by 3 bps to 1.04%, they are up 48 bps since the start of July and up 66 bps since the start of June. According to Monday's Money Fund Intelligence Daily, with data as of Friday (9/16), just 50 funds (out of 822 total) still yield between 0.00% and 0.99% with assets of $5.4 billion, or 0.1% of total assets; 137 funds yield between 1.00% and 1.49% with $139.7 billion in assets, or 2.8%; 70 funds yielded between 1.50% and 1.74% with $99.9 billion or 2.0%; 163 funds yielded between 1.75% and 1.99% ($825.2 billion, or 16.5%); 259 funds yielded between 2.00% and 2.24% ($2.650 trillion, or 52.9%) and 143 funds yielded 2.25% or more ($1.286 trillion, or 25.7%). Brokerage sweep rates were flat over the past week. Our Crane Brokerage Sweep Index, the average rate for brokerage sweep clients (almost all of which are swept into FDIC insured accounts; only Fidelity sweeps to a money market fund), was unchanged this past week at 0.26%. Euro money market fund yields went positive this week too for the first time since 2014. Offshore USD MMFs yield 2.21% (7-Day) on average (as of 9/16/22), up from 2.05% a month earlier. Yields averaged 0.03% on 12/31/21, 0.05% on 12/31/20, 1.59% on 12/31/19 and 2.29% on 12/31/18. EUR MMFs yield 0.14% on average, up from -0.80% on 12/31/21. They averaged -0.71% at year-end 2020, -0.59% at year-end 2019 and -0.49% at year-end 2018. Meanwhile, GBP MMFs yielded 1.66%, up 20 bps from a month ago, and up from 0.01% on 12/31/21. Sterling yields were 0.00% on 12/31/20, 0.64% on 12/31/19 and 0.64% on 12/31/18. (See our latest MFI International for more on the "offshore" money fund marketplace. Note that these funds are only available to qualified, non-U.S. investors.)

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