Money Fund Yields Inch up to 4.10%

Jan 18 23

Money fund yields inched higher again last week, with our Crane 100 Money Fund Index (7-Day Yield) rising three basis points to 4.10% for the week ended Friday, 1/13. Yields rose by 1 basis point the previous week. But they're up from 3.59% on Nov. 30, 2.88% on Oct. 31 and 2.66% on Sept. 30. Yields should be flat or inch higher in January, then jump again following an expected Feb. 1 Fed hike. The top-yielding money market funds have broken above 4.50% and should move towards 4.7% 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 681), shows a 7-day yield of 3.99%, up 5 bps in the week through Friday. Prime Inst MFs were up 3 bps at 4.25% in the latest week. Government Inst MFs rose by 7 bps to 4.04%. Treasury Inst MFs up 6 bps for the week at 3.99%. Treasury Retail MFs currently yield 3.78%, Government Retail MFs yield 3.77%, and Prime Retail MFs yield 4.07%, Tax-exempt MF 7-day yields were down at 2.24%. According to Tuesday's Money Fund Intelligence Daily, with data as of Friday (1/13), 25 funds (820 total) have fallen below the 2.0% yield mark this past week, and many continue to rise over 4.0%; 26 funds yield between 0.00% and 1.99% with $6.8 billion, or 0.1%; 119 funds yield between 2.00% and 2.99% with $126.8 billion, or 2.4%; 300 funds yield between 3.00% and 3.99% ($1.389 trillion, or 26.8%), and 375 funds yield 4.0% or more ($3.659 trillion, or 70.6%). Our Brokerage Sweep Intelligence Index, an average of FDIC-insured cash options from major brokerages, was unchanged last week at 0.52%. The latest Brokerage Sweep Intelligence, with data as of Jan. 13, shows that there were no changes over the past week. 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.

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