Crane 100 Money Fund Index Hits 3.5%
Money fund yields jumped yet again last week -- our Crane 100 Money Fund Index (7-Day Yield) rose 36 basis points to 3.48% in the week ended Thursday, 11/10. (Money markets were closed Friday for Veterans Day). Yields rose by 26 basis points the previous week and are up from 2.66% on Sept. 30. Yields should continue to move higher towards 4.0% as they digest the remainder of the Fed's Nov. 2nd 75 bps rate hike in coming weeks. They should break over 4.0% by year end, if, as expected, the Fed hikes rates again on Dec. 14. Our broader Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 677), shows a 7-day yield of 3.35%, up 35 bps in the week through Thursday. Prime Inst MFs were up 44 bps to 3.63% in the latest week. Government Inst MFs rose by 34 bps to 3.37%. Treasury Inst MFs up 28 bps for the week at 3.34%. Treasury Retail MFs currently yield 3.12%, Government Retail MFs yield 3.15%, and Prime Retail MFs yield 3.48%, Tax-exempt MF 7-day yields were unchanged at 1.82%. According to Monday's Money Fund Intelligence Daily, with data as of Thursday (11/10), 102 funds (out of 816 total) still yield between 0.00% and 1.99% with assets of $47.5 billion, or 0.9% of total assets; 132 funds yielded between 2.00% and 2.99% with $185.1 billion, or 3.7%; 582 funds yield 3.00% or more ($4.821 trillion, or 95.4%), and 3 funds have now officially broken over the 4.0% yield barrier. Brokerage sweep rates saw a number of changes 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 up 6 bps this past week at 0.40%. The latest Brokerage Sweep Intelligence, with data as of Nov. 10, shows four rate changes over the previous week. Ameriprise Financial Services increased rates to 0.25% for all balances between $1 and $99K, to 0.40% for all balances between $100K and $249K, to 0.55% for all balances between $250K and $499K, to 0.70% for all balances between $500K and $999K, to 1.49% for all balances between $1 million and $4.9 million and to 1.73% for all balances over $5 million. Merrill Lynch increased rates to 0.30% for balances between $1 million and $9.9 million and to 1.06% for all balances over $10 million. Raymond James increased rates to 0.25% for all balances between $1 and $99K, to 0.50% for all balances between $100K and $249K, to 2.00% for all balances between $1 million and $9.9 million and to 2.50% for all balances over $10 million. And lastly, RW Baird increased rates to 1.00% for all balances between $1 and $249K, to 1.69% for all balances between $250K and $999K, to 2.40% for all balances between $1 million and $1.9 million and to 3.01% for all balances over $5 million. Just 3 of 11 major brokerages still offer rates of 0.01% for balances of $100K (and lower tiers). These include: E*Trade, Merrill Lynch and Morgan Stanley.
