MSN asks, "Recent US election results have me concerned for the economy - should I park my cash in a money market fund over the next 4 years?" The piece says, "In September, the Federal Reserve began its rate-​cutting cycle. However, that hasn'​t discouraged investors from pouring money into U.​S. money-​market funds. According to Bloomberg, the assets under management in these mutual funds crossed a record $​7 trillion in November. So they'​re clearly still pretty popular despite the fact that they will deliver lower returns as interest rates are cut." They write, "If you'​re feeling skittish about the economy in the wake of the recent election, you may gain some financial security by putting your cash into a money market fund. But you should know that there are some drawbacks to consider, too.... It may seem curious that investors are flocking to MMFs at this time. One possible reason is that they aren'​t expecting interest rates to come down significantly in the near future. 'Few people seriously expect a return to ZIRP (​zero interest rate policy). Indeed, since the Fed started easing in September, markets have begun pricing in fewer cuts and the implied terminal rate has risen by around a full percentage point, and MMF inflows have accelerated. While there are myriad alternatives to MMFs, all come with downsides,' explained Jamie McGeever of Reuters in November."

BankRate writes, "Savings and money market account rates forecast for 2025: Yields will dip but remain higher than inflation." The article says, "Expect savings and money market account yields to slide lower this year, but they still should outpace inflation, according to the latest forecast from Bankrate chief financial analyst Greg McBride. McBride believes savings and money market yields will be 3.​8 percent annual percentage yield (​APY) for top-​yielding nationally available accounts at the end of 2025; that'​s 1.​25 percentage points (​or 125 basis points) lower than the highest yield at the end of 2024. Meanwhile, the national average yield is projected by the end of 2025 to be 0.​35 percent APY for savings accounts and 0.​4 percent APY for money market accounts." It states, "McBride expects three, 25 basis-​point rate cuts from the Federal Reserve in 2025. The Fed, however, is currently projecting two cuts for the year. But, according to McBride, if inflation stays lower as expected, it will be another banner year for savers. '​Any periods where yields were outpacing inflation tend to be pretty short-​lived,' McBride says." The piece adds, "[I]​n 2024, there weren'​t any rate increases, but savers benefited from the 550 basis points of rate increases from previous years and lower inflation that stayed relatively stable. Since March 2023, the top savings yield has been outpacing inflation. This is very different from June 2022, when inflation was at 9.​1 percent and the top savings yield was only around 1.​61 percent APY at that time."

Crane Data published its latest Weekly Money Fund Portfolio Holdings statistics Tuesday, which track a shifting subset of our monthly Portfolio Holdings collection. The most recent cut (​with data as of Dec. 27) includes Holdings information from 73 money funds (​up 13 from two weeks ago), or $​4.​020 trillion (​up from $​3.​538 trillion) of the $​7.​151 trillion in total money fund assets (​or 56.​2%) tracked by Crane Data. (Note: We didn'​t publish Weekly Holdings last week due to the Christmas Holiday. Our Weekly MFPH are e-​mail only and aren'​t available on the website. See our latest Monthly Money Fund Portfolio Holdings here and our Dec. 11 News, "Dec. Money Fund Portfolio Holdings: Treasuries Jump Again, Repo Dips.") Our latest Weekly MFPH Composition summary shows Government assets dominating the holdings list with Treasuries totaling $​1.​976 trillion (​up from $​1.​811 trillion two weeks ago), or 49.​2%; Repurchase Agreements (​Repo) totaling $​1.​326 trillion (​up from $​1.​138 trillion two weeks ago), or 33.​0%, and Government Agency securities totaling $​353.​1 billion (​up from $​308.​0 billion), or 8.​8%. Commercial Paper (​CP) totaled $​144.​8 billion (​up from two weeks ago at $​115.​3 billion), or 3.​6%. Certificates of Deposit (​CDs) totaled $​80.​5 billion (​up from $​62.​3 billion two weeks ago), or 2.​0%. The Other category accounted for $​88.​0 billion or 2.​2%, while VRDNs accounted for $​50.​3 billion, or 1.​3%. The Ten Largest Issuers in our Weekly Holdings product include: the US Treasury with $​1.​976 trillion (​49.​2% of total holdings), Fixed Income Clearing Corp with $​439.​5B (​10.​9%), the Federal Home Loan Bank with $​231.​3 billion (​5.​8%), RBC with $​90.​3B (​2.​2%), JP Morgan with $​84.​9B (​2.​1%), Federal Farm Credit Bank with $​84.​3B (​2.​1%), The Federal Reserve Bank of New York with $​75.​0B (​1.​9%), Citi with $​74.​2B (​1.​8%), BNP Paribas with $​73.​3B (​1.​8%) and Goldman Sachs with $​59.​6B (​1.​5%). The Ten Largest Funds tracked in our latest Weekly include: JPMorgan US Govt MM ($​307.​2B), Goldman Sachs FS Govt ($​267.​4B), JPMorgan 100% US Treas MMkt ($​235.​8B), Fidelity Inv MM: Govt Port ($​215.​9B), Morgan Stanley Inst Liq Govt ($​177.​8B), BlackRock Lq FedFund ($​175.​2B), Federated Hermes Govt ObI ($​166.​1B), BlackRock Lq Treas Tr ($​160.​1B), State Street Inst US Govt ($​159.​6B) and Fidelity Inv MM: MM Port ($​143.​8B). (​Let us know if you'​d like to see our latest domestic U.​S. and/​or "​offshore" Weekly Portfolio Holdings collection and summary.)

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