Money Fund Yields Climb to 4.71%
Money fund yields moved higher over the past week as they begin to digest the Federal Reserve's latest 25 basis point rate increase last Wednesday (5/2). Our Crane 100 Money Fund Index (7-Day Yield) was up 7 bps to 4.71% (it moved up to 4.77% yesterday) in the week ended Friday, 5/5. Yields are up from 4.61% on March 31, 4.39% on Feb. 28, 4.15% on Jan. 31 and 4.05% on 12/31/22. They've increased from 3.59% on Nov. 30, from 2.88% on Oct. 31 and from 2.66% on Sept. 30. Just a handful of the top-yielding money market funds yield above the 5.0% level, but more should move above this level this week as they digest the latest hike. The Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 689), shows a 7-day yield of 4.59%, up 6 bps in the week through Friday. Prime Inst MFs were up 7 bps at 4.81% in the latest week. Government Inst MFs rose by 8 bps to 4.72%. Treasury Inst MFs up 5 bps for the week at 4.55%. Treasury Retail MFs currently yield 4.33%, Government Retail MFs yield 4.39%, and Prime Retail MFs yield 4.64%, Tax-exempt MF 7-day yields were up 12 bps at 3.10%. According to Monday's Money Fund Intelligence Daily, with data as of Friday (5/5), just one money fund (out of 819 total) yields under 2.0%; 34 funds yield between 2.00% and 2.99% with $16.3 billion, or 0.3%; 130 funds yield between 3.00% and 3.99% ($143.6 billion, or 2.5%), and 654 funds yield 4.0% or more ($5.557 trillion, or 97.2%). Thirty one funds have now officially surpassed the 5.0% mark (though many are private and not listed in our "Highest-Yielding Funds" table above) but we expect a lot more to follow in coming weeks. Our Brokerage Sweep Intelligence Index, an average of FDIC-insured cash options from major brokerages, was unchanged at 0.56% after increasing one basis point 3 weeks ago. The latest Brokerage Sweep Intelligence, with data as of May 5, 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.
