The Financial Times writes "Nervy investors pour $1tn into money market funds." They tell us, "Investors have poured $1tn into global money market funds so far in 2023, attracted by the best yields available in years and uncertainty over the outlook for the US economy. The flood of cash into money market funds over the past eight-and-a-half months -- a trend concentrated mainly in the US -- puts the vehicles on course for record inflows of $1.5tn by the end of this year, according to Bank of America Securities, citing annualised data from flow tracker EPFR. Strategists at the US bank wrote overnight that the persistent flood of cash into such funds, which typically hold very low risk assets such as short-dated government debt that are easy to buy and sell, reflected 'one trillion dollars of doubt' about the outlook for the economy and riskier assets." See also, The Wall Street Journal's "Rising Rates Make Big Companies Even Richer." It states, "The winners from higher rates were high-quality borrowers, who locked in low interest rates around the pandemic with bonds maturing further in the future than any time this century. Higher rates have little immediate impact on their borrowing costs -- only affecting bonds when they are refinanced—while they earn more on their cash piles straight away." The piece adds, "Take Microsoft, the world's second-most valuable company. It has more cash and short-term investments than debt, so it was never going to be threatened by higher rates. But it has also fixed its borrowing costs: It paid exactly the same interest, $492 million, in the latest quarter as a year earlier. However, it earned substantially more on its cash and short-term investments, with the annualized rate rising to about 3.3% from 2.1%; combined with a small increase in its hoard to $111 billion, it earned $905 million in interest just in the quarter, up from $552 million. Microsoft's experience appears to be reflected economywide. Corporate net interest payments -- that is, interest paid on debt minus that received on savings -- fell as interest rates rose, the opposite of what usually happens."

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