Daily Links Archives: September, 2025
Crane in WSJ: Wall of Cash Staying Put
The Wall Street Journal writes, "U.S. Investors Are Flush With Cash, and Happy to Keep It There." The piece says, "U.S. investors are sitting on a pile of cash. Even with rates now coming down, many are in no rush to move it. Assets in money-market funds reached a record $7.7 trillion last week, with more than $60 billion flowing into those funds during the first four days of the month, according to Crane Data, an industry researcher. The latest rush into money funds began in 2022, when the Federal Reserve started raising rates. The yields on these funds, which typically hold short-term government debt, also rose, giving investors higher returns on their cash than they have had in years. Many have kept a larger slice of their portfolios in these cash-like investments ever since -- as the stock market raced to record highs." They explain, "That is unlikely to change soon, even with the Fed now cutting rates. Money funds are still yielding a lot more than what they had in the 2010s and early 2020s, when the financial crisis and then the Covid pandemic pushed rates to ultralow levels. With stocks by some measures now more expensive than ever, some investors are willing to wait for discounts. And it will take more than one (or two or three) rate cuts to change their minds. 'It is indeed a 'wall of cash,' because it ain't going anywhere,' said Peter Crane, president of Crane Data." The article adds, "Money-market funds offer a seven-day annualized net yield of 4.1% as of the end of August, according to Crane's index of 100 such funds. The national average annual yield for a bank savings account is a paltry 0.6%, according to a survey by Bankrate.... The cash stash in money-market funds is likely to keep growing through the end of the year, said Crane, who said he wouldn't be surprised to see total assets in the funds surpass $8 trillion by 2026. November and December are usually strong months for money funds, he said. Companies and governments might also temporarily park cash in money-market funds, he said, since their yields don't adjust to Fed moves as quickly as Treasurys do."
Barron's: Cuts Will Hurt More Than Help
Barron's writes, "Cash Yields Are Going Down. Here's Where to Move Your Money." The article comments, "The Federal Reserve's expected interest-rate cuts are a double-edged sword for consumers: bad for savers, good for borrowers. The upshot of Wednesday's quarter-point cut will depend on your household's mix of assets and liabilities. Do you have a lot of money parked in money-market funds? Are you looking to buy a house, refinance your mortgage, or whittle down credit card debt? On balance, Fed rate cuts reduce household discretionary income, David Kelly, chief global strategist for J.P. Morgan Asset Management, wrote in a recent note. The decline in income from money-market funds and other instruments generally exceeds savings on mortgage and other debt. Most mortgages are fixed, so they won't adjust lower on Fed action, and the majority were issued at low enough rates that they won't benefit from refinancing, Kelly notes." The piece continues, "That said, there are steps consumers can take to make the most of what's to come. 'This serves as a wake-up call for people to at least check how they're thinking about their cash and where to make risk allocations going forward,' says Jerome Schneider, head of short-term portfolio management at Pimco." Barron's adds, "Cash rates have drifted down over the past year, but they're still attractive -- in the 4% range for money-market funds, high-yield savings accounts, and other products. Expect to lose a quarter point on money-market funds after the Fed cut by that amount on Wednesday, although it usually takes a little time to filter through; yields on high-yield savings accounts don't move in tandem with the benchmark rate, but generally trend in the same direction. Yields on both will keep falling if the Fed follows through with a couple more cuts this year, which policymakers project the economic data will justify."
WSJ Opinion on Stablecoins, MMFs
The Wall Street Journal published an Opinion piece, "Stablecoins, Money-Market Funds and the S&L Crisis," which compares the introduction of stablecoins to the growth of money market funds decades earlier. Author Thomas Vartanian writes, "Celebrations over the recent passage of the Genius Act should be muted. It institutionalized cryptocurrencies in the U.S. by creating the first comprehensive regulations for stablecoins. But all too often when Washington lets new financial products on the scene, they aren't adequately regulated and quickly gain an advantage over existing financial instruments that are more heavily policed. Market convulsions, economic downturns and bank failures follow. I watched it happen when money-market funds burst into the market in the 1980s, bringing banks to the brink of insolvency. Stablecoins could do the same thing." He tells us, "I was in the room in the 1980s, when Congress and financial regulators struggled to find a way to allow money-market funds to coexist with banks. Markets didn't cooperate and Washington acted too slowly to stop disaster. While the government had long ago capped the interest banks could pay depositors at 5.25%, money-market funds could offer whatever the market demanded. When interest rates and inflation hit double digits, depositors rightfully shunned banks to earn 12% in a money-market fund. While the Genius Act prohibits stablecoin issuers from paying interest, it doesn't explicitly stop crypto exchanges and other intermediaries from doing so. If Congress and regulators aren't eagle-eyed, exchanges have plenty of incentive to try. A report from the Treasury Department in April estimated stablecoins could lure $6.6 trillion in deposit outflows. That could cause the sort of disaster I witnessed 40 years ago." Vartanian comments, "Between 1979 and 1989, money-market funds grew more than 20-fold, sucking deposits out of the banking system which would have otherwise been converted into loans for homes, cars and businesses. The securities firms offering money-market funds benefited from a regulatory ambiguity as similar to the one that now affects stablecoins. While securities companies weren't allowed to take deposits, there was no clear rule about money-market funds. Scrambling to clean up this financial mess, Washington debated whether it was better to even the playing field by capping money-market interest rates or by eliminating depositor interest limits entirely for banks. Bank regulators chose the latter as a matter of practicality and persuaded the securities, mutual-fund and money-market-fund industries not to oppose legislation -- in part by holding over the heads of securities firms the threat of Justice Department criminal prosecution for unlawfully soliciting deposits." He adds, "If we learned anything from the era, it is that Washington must continually adjust regulation on new products to be functionally symmetrical with banks' limits. People who create, sponsor or transfer money and investments should be required to meet high standards of integrity and financial knowledge. The system can't tolerate any more Sam Bankman-Frieds. And policymakers must be armed with better resources, artificial intelligence and more-reliable data so that they fully understand how changes in market structures will impact traditional trusted intermediaries and the economy they support. At some point cheering innovation must give way to a balancing of the benefits with the new financial risks."
Weekly Money Fund Portfolio Holdings
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 September 12) includes Holdings information from 62 money funds (up 8 from two weeks ago), or $3.847 trillion (up from $3.221 trillion) of the $7.652 trillion in total money fund assets (or 50.3%) tracked by Crane Data. (Note: 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 September 11 News, "Sept. Money Fund Portfolio Holdings: Repo Plummets, Treasuries Surge.") Our latest Weekly MFPH Composition summary shows Government assets dominating the holdings list with Treasuries totaling $1.910 trillion (up from $1.537 trillion two weeks ago), or 49.6%; Repurchase Agreements (Repo) totaling $1.297 trillion (up from $1.129 trillion two weeks ago), or 33.7%, and Government Agency securities totaling $334.1 billion (up from $298.9 billion two weeks ago), or 8.7%. Commercial Paper (CP) totaled $142.2 billion (up from $122.1 billion two weeks ago), or 3.7%. Certificates of Deposit (CDs) totaled $76.9 billion (up from $54.1 billion two weeks ago), or 2.0%. The Other category accounted for $51.5 billion or 1.3%, while VRDNs accounted for $36.5 billion or 0.9%. The Ten Largest Issuers in our Weekly Holdings product include: the US Treasury with $1.910 trillion (49.6% of total holdings), Fixed Income Clearing Corp with $412.1B (10.7%), the Federal Home Loan Bank with $207.7B (5.4%), JP Morgan with $115.6B (3.0%), BNP Paribas with $101.8B (2.6%), RBC with $91.3B (2.4%), Citi with $80.9B (2.1%), Federal Farm Credit Bank with $80.4B (2.1%), Wells Fargo with $77.2B (2.0%) and Bank of America with $49.9B (1.3%). The Ten Largest Funds tracked in our latest Weekly include: JPMorgan US Govt MM ($302.9B), Fidelity Inv MM: Govt Port ($277.8B), JPMorgan 100% US Treas MMkt ($264.0B), Goldman Sachs FS Govt ($228.4B), BlackRock Lq FedFund ($180.7B), Morgan Stanley Inst Liq Govt ($168.8B), BlackRock Lq Treas Tr ($163.2B), State Street Inst US Govt ($162.9B), Fidelity Inv MM: MM Port ($160.6B) and Dreyfus Govt Cash Mgmt ($159.0B). (Let us know if you'd like to see our latest domestic U.S. and/or "offshore" Weekly Portfolio Holdings collection and summary.)
Crane 100 MF Index Lower to 4.09%
Money fund yields (7-day, annualized, simple, net) were down 1 bp to 4.09% on average during the week ended Friday, September 12 (as measured by our Crane 100 Money Fund Index), after falling 1 bp the week prior. Fund yields should stay relatively flat until after the Fed cuts rates on September 17. They've declined by 97 bps since the Fed first cut its Fed funds target rate by 50 bps on Sept. 18, 2024, and they've declined by 54 bps since the Fed last cut rates by 1/4 point on 11/7/24. Yields were 4.11% on 8/31, 4.12% on 7/31, 4.13% on 6/30, 4.10% on 5/31, 4.13% on 4/30/25, 4.14% on 3/31/25 and 4.28% on average on 12/31/24. MMFs averaged 4.75% on 9/30/24, 5.10% on 6/28/24, 5.14% on 3/31/24 and 5.20% on 12/31/23. The broader Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 677), shows a 7-day yield of 3.98%, down 1 bp in the week through Friday. Prime Inst money fund yields were up 1 bp at 4.24% in the latest week. Government Inst MFs were down 1 bp at 4.10%. Treasury Inst MFs were down 3 bps at 4.00%. Treasury Retail MFs currently yield 3.77%, Government Retail MFs yield 3.81%, and Prime Retail MFs yield 4.02%, Tax-exempt MF 7-day yields were down 8 bps to 2.34%. Assets of money market funds fell by $175 million last week to $7.652 trillion, according to Crane Data's Money Fund Intelligence Daily. MMF assets hit a record high of $7.672 trillion (on September 10) after their previous high of $7.670 trillion set on September 9. For the month of September (MTD), MMF assets have increased $50.0 billion after increasing by $132.0 billion in August, $63.7 billion in July, $6.7 billion in June, $100.9 billion in May, decreasing $24.4 billion in April, increasing by $2.8 billion in March, $94.2 billion in February, $52.8 billion in January, $110.9 billion in December, $200.5 billion in November, and $97.5 billion in October. Weighted average maturities were at 42 days for the Crane MFA and 42 days the Crane 100 Money Fund Index. According to Monday's Money Fund Intelligence Daily, with data as of Friday (9/12), 116 money funds (out of 789 total) yield under 3.0% with $142.2 billion in assets, or 1.9%; 274 funds yield between 3.00% and 3.99% ($1.394 trillion, or 18.2%), 399 funds yield between 4.0% and 4.99% ($6.116 trillion, or 79.9%) and following the recent rate cut there continue to be zero funds yielding 5.0% or more. Our Brokerage Sweep Intelligence Index, an average of FDIC-insured cash options from major brokerages, was unchanged at 0.40%, after falling 1 bp seventeen weeks prior. The latest Brokerage Sweep Intelligence, with data as of September 12, shows no changes over the past week. Three of the 10 major brokerages tracked by our BSI still offer rates of 0.01% for balances of $100K (and lower tiers). These include: E*Trade, Merrill Lynch and Morgan Stanley.
CNBC.com's "ETF Edge" writes that the “$7 trillion 'wall of cash' worry is looming for investors once Fed interest rate cuts start." The piece says, "This may not be an era in which Americans are awash in physical currency fattening their wallets, but we are awash in cash parked inside accounts that have been generating attractive yields thanks to Federal Reserve interest rate hikes to combat inflation. There is a record amount of cash in money market funds, roughly $7.6 trillion, according to Crane Data. But as the Federal Reserve prepares to cut rates for the first time in a year, maybe by as much as 50 basis points -- a policy shift that will, over time, reduce the yields on risk-free cash-equivalent investments -- market attention has shifted to whether that cash will be on the move. At the most extreme, Wall Street's so-called 'wall of cash' theory -- which claims that all that cash on the move can create its own stock market rally -- has been debunked about as many times as it has been offered." They quote, "Peter Crane, president and publisher of money fund research firm Crane Data, has heard it all before, at least when it comes to the Fed and money market funds, and he has a simple response: money fund assets just keep growing, and the only times in recent history when they've gone down as opposed to up is when rates are literally at zero during periods of economic calamity. 'The rates matter but much less than most people believe,' Crane said. In fact, in the 52-year history of money market funds, assets have only gone down after the dotcom bust and financial crisis, periods where intense economic stress led to rock-bottom rates, a 'bottom of the rate cycle nailed to zero,' he said." CNBC writes, "If things get bad enough in the economy that the Fed has to cut more aggressively sooner rather than later, that's not exactly a sign of a market where investors are likely to be overly aggressive with their own risk profile, either. 'Dream on Wall Street,' Crane said. 'It makes for a good talking point, but the $7 trillion is not going anywhere but up.' There has also been a shift over time in the usage of money market funds, with what was once mostly a retail investor phenomenon now majority institutional and corporate cash -- roughly 60% of the market, according to Crane's data. 'They are not moving, no matter what,' he said. 'They are not going into the stock market.'" They comment, "It's not that money fund researchers like Crane deny that lower rates matter, or that some of the money fund assets may indeed move to higher-risk, higher return areas of the market -- he thinks that is maybe 10% of the $7 trillion-plus, though he adds there is no precise data to rely on for such an estimate. But when you consider the roughly $20 trillion that Americans leave in bank deposits, basically giving their money to Wall Street to go off and make more money on while earning no money themselves, a 25 basis point cut in the current interest rate environment does not exactly make money funds a dead option."
The Investment Company Institute released its latest weekly "Money Market Fund Assets" report Thursday, which shows money fund assets rising $43.8 billion to a record $7.303 trillion. MMFs rose $52.4 billion last week, and $17.2 billion the week before. MMF assets are up by $979 billion, or 15.5%, over the past 52 weeks (through 9/10/25), with Institutional MMFs up $574 billion, or 15.2% and Retail MMFs up $406 billion, or 15.8%. Year-to-date, MMF assets are up by $453 billion, or 6.6%, with Institutional MMFs up $222 billion, or 5.4% and Retail MMFs up $230 billion, or 8.4%. ICI's weekly release says, "Total money market fund assets increased by $43.82 billion to $7.30 trillion for the week ended Wednesday, September 10, the Investment Company Institute reported.... Among taxable money market funds, government funds increased by $41.22 billion and prime funds increased by $3.15 billion. Tax-exempt money market funds decreased by $551 million." ICI's stats show Institutional MMFs increasing $42.6 billion and Retail MMFs increasing $1.2 billion in the latest week. Total Government MMF assets, including Treasury funds, were $5.956 trillion (81.6% of all money funds), while Total Prime MMFs were $1.209 trillion (16.6%). Tax Exempt MMFs totaled $137.7 billion (1.9%). It explains, "Assets of retail money market funds increased by $1.24 billion to $2.97 trillion. Among retail funds, government money market fund assets increased by $203 million to $1.86 trillion, prime money market fund assets increased by $1.17 billion to $976.73 billion, and tax-exempt fund assets decreased by $133 million to $125.14 billion." Retail assets account for 40.8% of the total, and Government Retail assets make up 62.9% of all Retail MMFs. They add, "Assets of institutional money market funds increased by $42.58 billion to $4.34 trillion. Among institutional funds, government money market fund assets increased by $41.02 billion to $4.09 trillion, prime money market fund assets increased by $1.98 billion to $232.73 billion, and tax-exempt fund assets decreased by $418 million to $12.54 billion." Institutional assets accounted for 59.2% of all MMF assets, with Government Institutional assets making up 94.3% of all institutional MMF totals. According to Crane Data's separate Money Fund Intelligence Daily series, money fund assets increased by $70.1 billion month-to-date in September (through 9/10/25) to a record $7.672 trillion. Assets increased by $132.0 billion in August, $63.7 billion in July, $6.7 billion in June and $100.9 billion in May. They fell by $24.4 billion in April, but rose $2.8 trillion in March, $94.2 billion in February and $52.8 billion in January. They jumped $110.9 billion in December, $200.5 trillion in November, $97.5 billion in October and $149.8 billion last September. Note that ICI's asset totals don't include a number of funds tracked by the SEC and Crane Data, so they're almost $400 billion lower than Crane's asset series.
UBS's Sabatino on the 'Wall of Cash'
Yahoo Finance posted an interview with UBS Head of Global Liquidity Robert Sabatino titled, "Understanding money market funds amid economic, Fed uncertainty." Host Jared Blikre comments, "This is from the perspective of ... money market funds. We don't talk about these a lot, `but short-term liquidity influences stocks and bonds and what they do on a day-to-day basis. It can be the swing factor, and we've seen the US Treasury front and center in a lot of pulling a lot of these levers here.... What is the global liquidity situation right now and what do you think that portends for stocks and bonds?" Sabatino says, "Yeah, you highlighted a bunch of factors that are at play right now. We have digested a tremendous amount of treasury bill issuance, after we raised the debt ceiling. The market was able to handle that without any problem. It was almost $600 billion in issuance since July. I think it speaks to the nature of money markets, right? We are an industry that is used to dealing with incoming information, deploying assets in a very safe and liquid manner.... You do have periods that at month end, quarter ends ... we're coming up to corporate tax date, so the middle of September ... you could have a little bit of pressure on funding.... We heard from the Dallas Fed's Logan the other week letting the market know that there are facilities in place like the standing repo facility, in case any banks or broker dealers want to take their treasury positions and turn into cash." Blikre then queries, "I want to ask you about the cash on the sidelines argument that I hear a lot in the financial media. So there's $7.2 trillion parked in money market funds, and the theory goes, well, this could just come rushing into stocks at any moment. But I've looked through history at these at the charts of when these rates actually come down, and it usually lags the Fed by quite a long time. So the Fed will lower short-term short-term rates, and it takes people a year or two to figure out that they're not getting 4, 5, 6% in their money market account. Then that cash leaves, and sometimes by that time we're already in recession. So, how do you see this global liquidity situation, the $7.2 trillion on the sideline? Is that a good thing? I mean, is that a backstop?" Sabatino replies, "Yeah, it's not on the sideline, right? Investors are actively choosing to be in money market funds.... They like the safety, liquidity and the market rate that we provide. If you look at other cash type vehicles, deposits, let's say, those are administered rates, um, and sometimes they lag the market dramatically. So what we've seen ... we came off a period of a zero interest rate environment where money market assets remained very stable. And then the last nine years, we've had incremental growth every year. We've had tremendous growth the last three. I see that continuing.... No one argues that, growth in the equity market, you know, gold hitting all-time highs, no one questions that. But they question these assets and money market funds. And also, I don't think we spend enough time looking at deposits, right?" Finally, discussing bank account, Sabatino explains, "So it's over $18 trillion. So there's a tremendous amount of cash that investors are choosing to keep liquid. At the end of the day, there's so many concerns geopolitically with tariffs, with interest rates that many investors enjoy the safety and the yield that they're getting in money market funds. And even if we saw declining rates as you correctly stated, uh there is a lag. So we don't immediately lose assets and going from, you know, a 4% money market fund yield down to 2.5%, to 3.0% is not the end of the world. We're not we're not going back to zero."
AFP on Liquidity in Flux, Survey
The Association for Financial Professionals (AFP), which will be hosting its AFP25 Annual Conference in Boston October 26-28, published a brief titled, "Liquidity in Flux: Prioritizing Safety in Uncertainty." They ask, "How are companies responding to today's uncertainties? According to the 2025 AFP Liquidity Survey, underwritten by Invesco, organizations managing short-term investments are keeping safety a top priority. The results also highlighted a continued preference for traditional cash management vehicles, with interest-bearing deposit accounts (and time deposits) leading the pack, followed by government money market funds and treasury securities. In a companion webinar to the 2025 AFP Liquidity Survey, a panel of experts discussed the implications of the survey findings for treasury professionals. Tariffs and trade policy are new territory for many practitioners. Laurie Brignac, Chief Investment Officer for Invesco, underscored just how unusual this development is. 'This is the first time in my entire career [30+ years] that we’ve even talked about tariffs,' she said." The article tells us, "Marcel Santiz, Treasury Director for Masco Corporation, noted that his company expects tariffs to reduce cash flow through higher costs and weaker consumer demand. 'The overall cash impact is, we would expect to be down because we're paying tariffs that we were not paying before,' said Santiz. While they plan to maintain year-end cash targets, tariffs and their impacts may reduce foot traffic at retail, which could result in headwinds." AFP explains, "Money market funds are enjoying historic levels. Assets recently reached $7.4 trillion, and panelist Peter Crane, President and Publisher, Crane Data, predicted they could climb to $8 trillion by year-end. The combination of safety and favorable yields has drawn both retail and institutional investors, especially as bank deposits plateau. 'Nobody really has to fight for yield right now,' said Crane. 'All of a sudden, you've got 5%, now 4%, and everybody's happy with those levels.' Government and treasury funds alone are offering levels not seen in years. Even if rates decline, the lag in money fund repricing means they will remain competitive, retaining their status as a central tool in corporate liquidity management. With the debt ceiling lifted, U.S. Treasury bill issuance is ramping back up, providing ample supply for money market funds. This alleviates concerns about a shortage of safe, short-term instruments." Finally, the piece says, "While there is plenty of growing interest in stablecoins, tokenized funds as collateral tools and EFTs, the panel agreed they are early-stage experiments. 'There's a lot of smoke,' said Crane. 'There's probably a little fire at this point, but there's so much smoke in there.' Santiz explained that he would be reluctant to pursue such investments due to counterparty and liquidity risks, especially given past experiences with alternative assets.... Brignac added that tokenized funds are currently structured as share classes of government money funds, making them stable-value products, but adoption will depend on building trust and demonstrating clear use cases. 'Stay tuned,' said Crane. 'There are a lot of developments there.' For more on the AFP Liquidity Survey, see our June 25 News, "More AFP Liquidity Survey: Bank Deposits, Money Funds and T-Bills Rule," and our June 20 News, "AFP 2025 Liquidity Survey: MMFs Inch Higher; Deposits, T-Bills Lower."
Crane 100 MF Index Lower to 4.10%
Money fund yields (7-day, annualized, simple, net) were down 1 bp at 4.10% on average during the week ended Friday, September 5 (as measured by our Crane 100 Money Fund Index), after remaining unchanged the week prior. Fund yields should stay relatively flat until after the Fed cuts rates on September 17. They've declined by 96 bps since the Fed first cut its Fed funds target rate by 50 bps on Sept. 18, 2024, and they've declined by 53 bps since the Fed last cut rates by 1/4 point on 11/7/24. Yields were 4.11% on 8/31, 4.12% on 7/31, 4.13% on 6/30, 4.10% on 5/31, 4.13% on 4/30/25, 4.14% on 3/31/25 and 4.28% on average on 12/31/24. MMFs averaged 4.75% on 9/30/24, 5.10% on 6/28/24, 5.14% on 3/31/24 and 5.20% on 12/31/23. The broader Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 677), shows a 7-day yield of 3.99%, down 1 bp in the week through Friday. Prime Inst money fund yields down 1 bp at 4.23% in the latest week. Government Inst MFs were unchanged at 4.11%. Treasury Inst MFs were down 1 bp at 4.03%. Treasury Retail MFs currently yield 3.79%, Government Retail MFs yield 3.81%, and Prime Retail MFs yield 4.02%, Tax-exempt MF 7-day yields were down 13 bps to 2.42%. Assets of money market funds rose by $50.2 billion last week to $7.653 trillion, according to Crane Data's Money Fund Intelligence Daily. MMF assets hit a record high of $7.663 trillion (on September 4) after their previous high of $7.633 trillion set on September 2. For the month of September (MTD), MMF assets have increased $50.2 billion after increasing by $132.0 billion in August, $63.7 billion in July, $6.7 billion in June, $100.9 billion in May, decreasing $24.4 billion in April, increasing by $2.8 billion in March, $94.2 billion in February, $52.8 billion in January, $110.9 billion in December, $200.5 billion in November, and $97.5 billion in October. Weighted average maturities were at 42 days for the Crane MFA and 42 days the Crane 100 Money Fund Index. According to Monday's Money Fund Intelligence Daily, with data as of Friday (9/5), 116 money funds (out of 789 total) yield under 3.0% with $143.8 billion in assets, or 1.9%; 266 funds yield between 3.00% and 3.99% ($1.339 trillion, or 17.5%), 407 funds yield between 4.0% and 4.99% ($6.170 trillion, or 80.6%) and following the recent rate cut there continue to be zero funds yielding 5.0% or more. Our Brokerage Sweep Intelligence Index, an average of FDIC-insured cash options from major brokerages, was unchanged at 0.40%, after falling 1 bp sixteen weeks prior. The latest Brokerage Sweep Intelligence, with data as of September 5, shows no changes over the past week. Three of the 10 major brokerages tracked by our BSI still offer rates of 0.01% for balances of $100K (and lower tiers). These include: E*Trade, Merrill Lynch and Morgan Stanley.
CoinDesk on BofA Tokenization Report
CoinDesk writes, "Tokenization Is 'Mutual Fund 3.0,' Bank of America Says." The article tells us, "Bank of America (BAC) sees tokenization, the creation of a virtual investment vehicle on the blockchain linked to a tangible asset, as the next phase in the evolution of investment products, describing it as 'mutual fund 3.0,' the Wall Street bank said in a Friday report. Just as mutual funds first emerged in 1924 and exchange-traded funds (ETFs) reshaped investing in the 2000s, blockchain technology could underpin a new generation of financial vehicles, analysts led by Craig Siegenthaler wrote." The piece continues, "Still, regulation remains a headwind. The GENIUS and Clarity Acts address stablecoins, but leave many questions about tokenized funds unresolved. Still, the bank argues, the advantages of tokenization will drive adoption over time despite limited access for U.S. investors today.... That shift pushed firms toward monetizing client cash and order flow, making tokenized versions of these assets less compelling, the bank's analysts said. But tokenized money market funds, powered by smart contracts, could upend those cash sweep economics and open new revenue models." CoinDesk adds, "Bank of America expects tokenized money market funds to lead adoption thanks to their attractive yields relative to stablecoins, which cannot pay interest under the Genius Act, with private credit and high yield likely to follow."
WisdomTree Treasury MM Digital Fund
WisdomTree Government Money Market Digital Fund (WTGXX), part of WisdomTree Digital Trust, filed to change its name to WisdomTree Treasury Money Market Digital Fund. The Prospectus update <b:> for the "Supplement dated August 28, 2025, to the currently effective Statutory Prospectus and Statement of Additional Information, dated November 1, 2024," says, "Effective on or about November 1, 2025 (the “Effective Date”), the Fund’s name, non-fundamental investment policy, and principal investment strategies will be revised. Why the Changes: `The impetus for the changes is to ensure the Fund's eligible investor base includes payment stablecoin issuers seeking to comply with newly enacted U.S. legislation, namely the Guiding and Establishing National Innovation for U.S. Stablecoins Act (the 'GENIUS Act') and any implementing regulations. These changes will align the Fund's portfolio with the reserve asset requirements set forth in GENIUS Act, positioning the Fund as an eligible investment option for such payment stablecoin issuers. The Fund will remain an investment option for other types of institutional investors as well as retail investors." Discussing, "What is Changing," the filing tells us, "Effective on or around November 1, 2025, the Fund's name, non-fundamental investment policy, and principal investment strategies will be amended as follows: Current - WisdomTree Government Money Market Digital Fund; Revised - WisdomTree Treasury Money Market Digital Fund." It says, "Under normal circumstances, at least 80% of the value of its net assets will be invested in government securities and repurchase agreements collateralized by government securities. Under normal circumstances, at least 80% of the value of its net assets will be invested in Treasury securities, repurchase agreements collateralized by Treasury securities and shares of registered Treasury money market funds. Accordingly, the Fund's eligible investment universe under its principal investment strategies will be narrowed to exclude U.S. government agency securities and U.S. Treasury securities with a remaining maturity greater than 93 days, which are not permissible reserve assets under the GENIUS Act. Because the Fund intends to invest in a narrower investment universe than under its current principal investment strategies, the Fund's yield may be lower than it is currently achieving and lower than other money market funds that are permitted to invest in a wider universe of investments." WisdomTree adds, "What is Not Changing: The Fund's investment objective will not change, whereby the Fund will continue to seek to provide investors with a high level of current income consistent with preservation of capital and liquidity and the maintenance of a stable $1.00 net asset value (NAV) per share. In addition, the Fund will continue to seek to operate in compliance with Rule 2a-7 under the Investment Company Act of 1940. Lastly, the Fund's management fee is not changing and its ticker symbol of WTGXX will remain the same." (For more, see Crane Data's Feb. 26, 2024 News," "WisdomTree Launches Digital Govt MMF; Tradias Tokenizes First Euro MF.")
Weekly Money Fund Portfolio Holdings
Crane Data published its latest Weekly Money Fund Portfolio Holdings statistics Wednesday (a day late due to the Labor Day Holiday), which track a shifting subset of our monthly Portfolio Holdings collection. The most recent cut (with data as of August 29) includes Holdings information from 54 money funds (down 20 from a week ago), or $3.221 trillion (down from $4.250 trillion) of the $7.602 trillion in total money fund assets (or 42.4%) tracked by Crane Data. (Note: 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 August 12 News, "August Money Fund Portfolio Holdings: Repo Plummets, T-Bills Surge.") Our latest Weekly MFPH Composition summary shows Government assets dominating the holdings list with Treasuries totaling $1.537 trillion (down from $1.953 trillion a week ago), or 47.7%; Repurchase Agreements (Repo) totaling $1.129 trillion (down from $1.518 trillion a week ago), or 35.1%, and Government Agency securities totaling $298.9 billion (down from $362.8 billion a week ago), or 9.3%. Commercial Paper (CP) totaled $122.1 billion (down from $183.2 billion a week ago), or 3.8%. Certificates of Deposit (CDs) totaled $54.1 billion (down from $99.9 billion a week ago), or 1.7%. The Other category accounted for $46.6 billion or 1.4%, while VRDNs accounted for $33.3 billion or 1.0%. The Ten Largest Issuers in our Weekly Holdings product include: the US Treasury with $1.537 trillion (47.7% of total holdings), Fixed Income Clearing Corp with $322.4B (10.0%), the Federal Home Loan Bank with $179.9B (5.6%), BNP Paribas with $90.2B (2.8%), JP Morgan with $86.5B (2.7%), RBC with $82.6B (2.6%), Federal Farm Credit Bank with $76.8B (2.4%), Citi with $76.0B (2.4%), Wells Fargo with $70.2B (2.2%) and Bank of America with $43.3B (1.3%). The Ten Largest Funds tracked in our latest Weekly include: JPMorgan US Govt MM ($299.3B), Fidelity Inv MM: Govt Port ($277.4B), JPMorgan 100% US Treas MMkt ($265.1B), Goldman Sachs FS Govt ($236.1B), Morgan Stanley Inst Liq Govt ($167.3B), Fidelity Inv MM: MM Port ($163.8B), State Street Inst US Govt ($159.6B), Dreyfus Govt Cash Mgmt ($146.0B), Allspring Govt MM ($128.3B) and First American Govt Oblg ($114.7B). (Let us know if you'd like to see our latest domestic U.S. and/or "offshore" Weekly Portfolio Holdings collection and summary.)
Crane 100 MF Index Flat at 4.11%
Money fund yields (7-day, annualized, simple, net) were unchanged at 4.11% on average during the week ended Friday, August 29 (as measured by our Crane 100 Money Fund Index), after remaining unchanged the week prior. Fund yields should stay relatively flat until the Fed cuts rates again, perhaps in mid-September. They've declined by 95 bps since the Fed first cut its Fed funds target rate by 50 bps on Sept. 18, 2024, and they've declined by 52 bps since the Fed last cut rates by 1/4 point on 11/7/24. Yields were 4.11% on 8/31, 4.12% on 7/31, 4.13% on 6/30, 4.10% on 5/31, 4.13% on 4/30/25, 4.14% on 3/31/25 and 4.28% on average on 12/31/24. MMFs averaged 4.75% on 9/30/24, 5.10% on 6/28/24, 5.14% on 3/31/24 and 5.20% on 12/31/23. The broader Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 677), shows a 7-day yield of 4.00%, down 1 bp in the week through Friday. Prime Inst money fund yields didn't change at 4.24% in the latest week. Government Inst MFs were unchanged at 4.11%. Treasury Inst MFs were down 1 bp at 4.04%. Treasury Retail MFs currently yield 3.81%, Government Retail MFs yield 3.82%, and Prime Retail MFs yield 4.02%, Tax-exempt MF 7-day yields were up 10 bps to 2.55%. Assets of money market funds rose by $62.2 billion last week to $7.602 trillion, according to Crane Data's Money Fund Intelligence Daily.MMF assets hit a record high of $7.602 trillion (on August 29) after their previous high of $7.599 trillion set on August 28. For the month of August (MTD), MMF assets have increased $132.0 billion after increasing by $63.7 billion in July, $6.7 billion in June, $100.9 billion in May, decreasing $24.4 billion in April, increasing by $2.8 billion in March, $94.2 billion in February, $52.8 billion in January, $110.9 billion in December, $200.5 billion in November, $97.5 billion in October and $149.8 billion in September. Weighted average maturities were at 41 days for the Crane MFA and 41 days the Crane 100 Money Fund Index. According to Tuesday's Money Fund Intelligence Daily, with data as of Friday (8/29), 114 money funds (out of 789 total) yield under 3.0% with $136.9 billion in assets, or 1.8%; 256 funds yield between 3.00% and 3.99% ($1.326 trillion, or 17.4%), 419 funds yield between 4.0% and 4.99% ($6.140 trillion, or 80.8%) and following the recent rate cut there continue to be zero funds yielding 5.0% or more. Our Brokerage Sweep Intelligence Index, an average of FDIC-insured cash options from major brokerages, was unchanged at 0.40%, after falling 1 bp fifteen weeks prior. The latest Brokerage Sweep Intelligence, with data as of August 29, shows no changes over the past week. Three of the 10 major brokerages tracked by our BSI still offer rates of 0.01% for balances of $100K (and lower tiers). These include: E*Trade, Merrill Lynch and Morgan Stanley.
Reuters on OCBC Digital CP Launch
Reuters writes that "OCBC kicks off $1 billion digital US commercial paper programme." They explain, "Singapore's second-largest bank Oversea-Chinese Banking Corp (OCBC) said ... it has established a $1 billion digital U.S. commercial paper programme, bolstering its dollar funding capabilities. U.S. commercial papers are a relatively inexpensive funding source that corporations use to meet their immediate cash flow needs. Through the programme, OCBC aims to tap into the $1.4 trillion U.S. commercial paper market." The article says, "The bank has leveraged blockchain to establish the programme, which will complement its $25 billion conventional U.S. commercial paper programme established in August 2011. J.P. Morgan's Digital Debt Service application will act as the sole dealer. The funds raised will be used for general funding purposes, OCBC said." Kenneth Lai, OCBC's head of global markets, comments, "Singapore's blockchain ecosystem is advancing fast, and asset tokenisation is gaining real momentum. Our focus is now firmly on commercialisation." Reuters adds, "The first U.S. commercial paper tokenised issuance under the programme took place on August 20."
