Money Fund Yields Inch Up to 4.85%

May 23 23

Money fund yields inched higher over the past week as they finished digesting the Federal Reserve's May 2nd 25 basis point rate increase. Our Crane 100 Money Fund Index (7-Day Yield) was up 1 bp to 4.85% in the week ended Friday, 5/19, after increasing by 13 bps the week prior. Yields are up from 4.64% on April 30, 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. A number of the top-yielding money market funds now yield above the 5.0% level, and more should move above this level in coming days as they digest the remainder of the latest Fed hike. The Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 689), shows a 7-day yield of 4.73%, up 2 bps in the week through Friday. Prime Inst MFs were up 2 bps at 4.96% in the latest week. Government Inst MFs rose by 1 bp to 4.84%. Treasury Inst MFs up 4 bps for the week at 4.68%. Treasury Retail MFs currently yield 4.45%, Government Retail MFs yield 4.53%, and Prime Retail MFs yield 4.79%, Tax-exempt MF 7-day yields were down 18 bps at 2.60%. According to Monday's Money Fund Intelligence Daily, with data as of Friday (5/19), just four money funds (out of 819 total) yield under 2.0%; 121 funds yield between 2.00% and 2.99% with $115.3 billion, or 2.0%; 20 funds yield between 3.00% and 3.99% ($13.3 billion, or 0.2%), 546 funds yield between 4.0% and 4.99% ($3.646 trillion, or 62.9%) and 128 funds now yield 5.0% or more ($2.021 trillion, or 34.9%). Over the past week, 9 funds have now officially surpassed the 5.0% mark (though many are private and not listed in our "Highest-Yielding Funds" table above) and we expect more to follow in coming weeks. Our Brokerage Sweep Intelligence Index, an average of FDIC-insured cash options from major brokerages, was unchanged at 0.59% after rising 3 bps last week. The latest Brokerage Sweep Intelligence, with data as of May 19, 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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