MMF Break 4.0%; Sweep Rates 0.52%
Money fund yields continued their march higher last week, with our Crane 100 Money Fund Index (7-Day Yield) increasing 25 basis points to 4.04% for the week ended Friday, 12/23. Yields rose by 16 basis points the previous week and are up from 3.59% on Nov. 30, up from 2.88% on Oct. 31 and up from 2.66% on Sept. 30. Yields broke the 4.0% level last Wed., and they should keep inching higher as they digest the remained of the last 50 bps Fed hike. The top-yielding money market funds have broken above 4.50% and should move towards 4.75% in coming weeks. (See our "Highest-Yielding Money Funds" table above). The Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 680), shows a 7-day yield of 3.91%, up 25 bps in the week through Friday. Prime Inst MFs were up 29 bps to 4.21% in the latest week. Government Inst MFs rose by 23 bps to 3.94%. Treasury Inst MFs up 18 bps for the week at 3.87%. Treasury Retail MFs currently yield 3.67%, Government Retail MFs yield 3.69%, and Prime Retail MFs yield 4.05%, Tax-exempt MF 7-day yields were up at 3.20%. According to Monday's Money Fund Intelligence Daily, with data as of Friday (12/23), every money market fund (819 total) yields over 2.0% and almost all are now over 3.0%; 36 funds yield between 2.00% and 2.99% with $16.0 billion, or 0.3%; 476 funds yield between 3.00% and 3.99% ($2.104 trillion, or 40.9%), and now 307 funds yield 4.0% or more ($3.027 trillion, or 58.8%). Our Brokerage Sweep Intelligence Index, an average of FDIC-insured cash options from major brokerages, jumped 9 bps last week to 0.52% as Fidelity, R.W. Baird, Raymond James and Schwab all increased rates. The latest Brokerage Sweep Intelligence, with data as of Dec. 23, shows that Fidelity hiked rates to 2.19% from 1.4% (for all balances). Raymond James increased rates to 2.25% for balances between $1 and $9.9 million and to 3.00% for balances over $10 million. RW Baird increased rates to 1.69% for all balances between $1 and $999K, to 2.39% for balances between $1 million and $1.9 million, and to 3.00% for all balances over $5 million. Schwab increased rates to 0.45% for all balances from 0.40%. 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.
