Money Market News
Federated Hermes reported Q3'25 earnings Thursday night and hosted its Q3'25 earnings call on Friday morning. In the press release, President & CEO J. Christopher Donahue, says, "In the declining rate environment of the third quarter, investors with interest in capital preservation and liquidity continued to rely on our money market offerings. They also turned to our microshort and ultrashort funds, which are a step further out the yield curve and pursue higher yields than money market strategies."
The Investment Company Institute's released its latest weekly "Money Market Fund Assets" report and its latest monthly "Trends in Mutual Fund Investing - September 2025" and "Month-End Portfolio Holdings of Taxable Money Funds" on Thursday. The former shows money fund assets increasing by $20.6 billion to a new record high of $7.418 trillion. Assets have risen in 5 of the last 6 weeks, and 13 of the past 15 weeks. MMFs rose $30.4 billion the prior week, after falling $17.8 billion two weeks prior. MMF assets are up by $912 billion, or 14.0%, over the past 52 weeks (through 10/29/25), with Institutional MMFs up $535 billion, or 13.8% and Retail MMFs up $377 billion, or 14.4%. Year-to-date, MMF assets are up by $568 billion, or 8.3%, with Institutional MMFs up $299 billion, or 7.3% and Retail MMFs up $269 billion, or 9.8%.
Assets of money market funds rose by $27.3 billion over the past week to a record high $7.821 trillion (as of 10/28), according to Crane Data's Money Fund Intelligence Daily. MMF assets broke above the $7.8 trillion level for the first time ever on October 27. Month-to-date in October (through 10/28), MMF assets have increased $113.1 billion, after increasing by $105.2 trillion in September, $132.0 billion in August and $63.7 billion in July. They rose $6.7 billion in June and $100.9 billion in May, but decreased $24.4 billion in April. Assets increased 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 last October.
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 October 24) includes Holdings information from 74 money funds (up 12 from a week ago), or $4.836 trillion (up from $3.924 trillion) of the $7.764 trillion in total money fund assets (or 62.3%) 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 October 10 News, "Oct. Money Fund Portfolio Holdings: T-Bills Jump Again, Repo Rebounds.")
As we wrote yesterday, the Federal Reserve Bank of Dallas published a paper titled, "Network structure of money markets and firms affects policy transmission," which also includes a nice primer on the repo, or repurchase agreement market. They write, "The repo market is the largest market for overnight liquidity. It is a critical source of financing for dealers, hedge funds and other non-depositories. Asset managers (including money market funds) and large depositories do most of the net lending in this market. Repo transactions take place across multiple segments, typically identified by whether they are centrally cleared and whether they occur on the books of custodial banks. In triparty repo, which occurs on the books of a custodial bank, most of the borrowing activity can be attributed to dealers and foreign banks." (Note: Thanks to those who visited with us during `AFP 25 in Boston!)
Earlier this month, the Federal Reserve Bank of Dallas published a paper titled, "Network structure of money markets and firms affects policy transmission," which serves as an excellent primer and overview of a number of issues in the money markets. It explains, "Banks rely on an intricate network of money markets for liquidity management, including brokered deposits, commercial paper, Federal Home Loan Bank advances, federal funds, Eurodollars and selected deposits and repurchase agreements. Different types of financial institutions participate in individual money markets, and the relationships between market rates are influenced by cross-product elasticities and arbitrage. The pass-through efficiency of policy rates, as measured by dispersion in money market rates, is highest when money market rates are close to the rate of interest on reserves. Understanding the underlying network structure of money markets provides valuable insights for monitoring reserve conditions and their evolution in response to regulatory and market changes." (Note: For those looking to learn about the money markets, Crane Data will be hosting its "basic training" Money Fund University, Dec. 18-19 in Pittsburgh. We're also exhibiting at the AFP 2025 annual treasury conference in Boston (10/26-28). We hope to see you there!)
Northern Trust (NTRS) released its Q3'25 earnings and hosted its latest earnings conference call earlier this week. CEO Mike O'Grady says, "The third quarter was marked by product innovation, including the launch of 11 new ETF strategies, eight of which are industry-first fixed-income distributing ladder ETFs.... Liquidity continues to be a standout area, with NTAM reporting its 11th consecutive quarter of positive flows. We expanded our Global Money Market Fund platform in the quarter with the launch of a U.S. Dollar Treasury liquidity strategy for European clients, building on the success of our onshore U.S. Treasury instrument strategy, which has already amassed more than $6 billion since its launch in June of 2024. Beyond liquidity, we saw positive flows in ETFs and custom SMAs, both key areas of focus, and fixed income, including two large high-yield mandates."
Charles Schwab also released Q3'25 earnings and hosted its 2025 Fall Business Update late last week. CFO Mike Verdeschi tells us, "Client cash levels continue to reflect normal behavior, inclusive of organic growth, seasonality and strong client engagement as equity markets reached record levels. We made further progress in reducing supplemental borrowings, which ended the quarter at $14.8 billion or just within the upper bound of our business as usual range.... Bank deposit account fees moved higher year-over-year due to an improved net yield as lower-yielding fixed-rate obligations continue to mature and converted into the floating rate bucket. September marked an inflection point for the BDA as we transition into the new $60 billion to $90 billion operating range for the remainder of the agreement and we gained the flexibility to move balances between the BDA and our balance sheet. During the third quarter, we transferred $3 billion worth of balances to Schwab to accelerate the paydown of bank supplemental borrowings."
BNY released its third quarter earnings late last week, and the giant custodial bank discussed money markets, stablecoins and tokenized money markets on its earnings call. President & CEO Robin Vince tells us, "Our early commitment to the digital asset space, paired with the principles of safety, scalability and innovation that have defined BNY for centuries, now positions us to support the growing institutional adoption of digital asset products. In just one example from this past quarter, OpenEden, a leading platform for the tokenization of real-world assets, headquartered in Singapore, appointed BNY as investment manager and primary custodian for the underlying assets of its flagship Tokenized U.S. Treasury Bills Fund."
Money fund yields (7-day, annualized, simple, net) increased by 2 bps to 3.93% on average during the week ended Friday, October 17 (as measured by our Crane 100 Money Fund Index), after falling 3 bps the week prior. Fund yields should continue to inch lower in the coming weeks as they finish digesting the Fed's Sept. 17 25 bps cut, and they should move lower again if, as expected, the Fed cuts again on October 29. They've declined by 113 bps since the Fed first cut in the Fed funds target rate by 50 bps on Sept. 18, 2024, and they've declined by 70 bps since the Fed cut rates by 1/4 point on 11/7/24. Yields were 3.94% on 9/30, 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.
Barron's writes that, "Money-Market ETFs Have Arrived. Should You Buy One?" They explain, "Not too long ago, investors who wanted to park cash in an exchange-traded fund version of a money-market mutual fund had to settle for ultrashort-dated bond ETFs as a proxy. That has changed with the recent launch of a few money-market ETFs, which have quickly gained assets, even as the Federal Reserve cuts interest rates. The handful of money-market ETFs include the $3.4 billion Simplify Government Money Market, the $361.2 million iShares Prime Money Market, the $269.3 million Schwab Government Money Market, the $77.2 million iShares Government Money Market, and the $60 million Texas Capital Government Money Market, which kicked off the category when it launched in September 2024."
A press release titled, "BlackRock Introduces '40 Act 2a7 Money Market Fund in GENIUS-aligned Form," is subtitled, "As BlackRock's cash management business surpasses $1 trillion in assets under management, the firm introduces a GENIUS Act-aligned '40 Act 2a-7 money market fund to meet growing demand in the stablecoin market." It tells us, "BlackRock announced a strategic update to one of its money market funds, reflecting a refined investment approach designed to enhance liquidity, align with emerging regulatory frameworks, and support the evolving needs of clients." (Note: As of Sept. 30, Crane Data shows BlackRock with $665.6 billion in U.S. money funds and $342.4 billion in European or "offshore" money funds, for a total of $1.008 trillion.)
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