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The Federal Reserve released its latest quarterly "Z.1 Financial Accounts of the United States statistical survey (formerly the "Flow of Funds") last Friday. Among the 4 tables it includes on money market mutual funds, the Second Quarter 2019 edition shows that Total MMF Assets increased by $127 billion to $3.206 trillion in Q2. The Household Sector, by far the largest investor segment with $1.908 trillion, saw assets jump in Q2, as did the next largest segments, Nonfinancial Corporate Businesses and Other Financial Business (what we believe was formerly labelled Funding Corporations). Repos jumped and Treasuries plunged among money fund assets in Q2.

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Money funds rose for the 3rd week in a row and for the 20th week out of the past 22 weeks, retaking the $3.4 trillion level for the first time since October 2009. Assets jumped Tuesday and Wednesday after seeing big outflows Monday and the previous Friday due to quarterly tax payments; they ended the week just slightly higher. ICI's latest "Money Market Fund Assets" report shows that assets have increased by $355 billion, or 11.6%, year-to-date. Over the past 52 weeks, ICI's money fund asset series has increased by $537 billion, or 18.7%, with Retail MMFs rising by $239 billion (22.5%) and Inst MMFs rising by $298 billion (16.5%).

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The Federal Reserve Board cut interest rates again yesterday, lowering its Federal funds target rate range to 1.75-2.00 percent, its second cut in a month and a half. The Fed's previous cut on July 31 was the first reduction in over 10 years. (See our Aug. 1 News, "Fed Cuts Rates Quarter to 2.0-2.25 Percent; FP on USAA, Schwab Deal.") Money fund yields, which jumped Tuesday on the mysterious spike in repo rates, are expected to fall in coming days and to pass through the 25 basis point decline over the next month. We review the Fed move, the repo anomaly, and a couple other recent articles, below.

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ICI released its monthly "Money Market Fund Holdings" summary yesterday, which reviews the aggregate daily and weekly liquid assets, regional exposure, and maturities (WAM and WAL) for Prime and Government money market funds. We quote from ICI's latest report, review our latest Weekly Money Fund Portfolio Holdings, and summarize recent asset flows below. (See too our Sept. 12 News, "Sept. Money Fund Portfolio Holdings: Treasuries, Repo Jump; CP Down.")

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Crane Data's latest MFI International shows assets in "offshore" or European money market mutual funds rising modestly in GBP and gently falling in USD and Euro in the latest month through September 13. These U.S.-style funds, domiciled in Ireland or Luxemburg and denominated in US Dollars, Sterling and Euro, decreased by $2.8 billion to $844.3 billion month-to-date in September, and they're now down by $1.6 billion year-to-date. Offshore USD money funds have inched up $1.4 billion MTD and they're up $7.1 billion YTD. Euro funds are down E6.3 billion so far in September, and YTD they're down E0.1 billion. GBP funds have risen by L2.3 billion through September 13, are they are up by L16.2 billion YTD. U.S. Dollar (USD) money funds (175) account for over half ($461.1 billion, or 54.6%) of our "European" money fund total, while Euro (EUR) money funds (78) total E98.9 billion (13.0%) and Pound Sterling (GBP) funds (103) total L225.6 billion (32.4%). We summarize our latest "offshore" money fund statistics and our Money Fund Intelligence International Portfolio Holdings (which went out to subscribers yesterday), below.

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The September issue of our Bond Fund Intelligence, which was sent out to subscribers Monday morning, features the lead story, "Ultra-Short Gets Even Hotter; A Look at Negative Yields," which looks at the strong flows into the shortest segment of the bond fund marketplace and "Regulators, ICI Debate Run Risk in Bond Funds (Again)," which reviews the discussion over liquidity concerns and run risk in BFs. BFI also recaps the latest Bond Fund News and includes our Crane BFI Indexes, which show bond fund yields plummeted and returns skyrocketed in August. We excerpt from the new issue below. (Contact us if you'd like to see our Bond Fund Intelligence and BFI XLS spreadsheet, or our Bond Fund Portfolio Holdings data.)

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Wells Fargo Asset Management's most recent monthly Portfolio Manager Commentary" discusses the most recent round of money market fund reforms and how funds might hold up during a recession. They tell us, "While not all recessions are created equal, the most recent SEC rules implemented in 2016, acting in combination with the stringent regulations imposed on the banking sector after the financial crisis, have created an even more stable backdrop for MMFs than existed in the past. The new rules that came with the SEC's MMF revamp, discussed in greater detail below, are consistent with the conservative manner in which our funds have always been managed, emphasizing preservation of capital and high levels of liquidity."

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Crane Data released its September Money Fund Portfolio Holdings Wednesday, and our most recent collection of taxable money market securities, with data as of August 31, 2019, shows a big jump in Treasury and Repo holdings, and declines in CP and Agencies. Money market securities held by Taxable U.S. money funds (tracked by Crane Data) increased by $93.0 billion to $3.597 trillion last month, after increasing $102.1 billion in July, $18.7 billion in June and $77.2 billion in May. Repo continues to be the largest portfolio segment, followed by Treasury securities, then Agencies. CP remained fourth ahead of CDs, Other/Time Deposits and VRDNs. Below, we review our latest Money Fund Portfolio Holdings statistics. (Visit our Content center to download the latest files, or contact us to see our latest Portfolio Holdings reports.)

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The Federal Reserve Bank of New York posted a new brief recently on its "Liberty Street Economics" blog. Entitled, "The Transmission of Monetary Policy and the Sophistication of Money Market Fund Investors, it examines Fed rate moves and their impact on money market fund yields. Authors Marco Cipriani, Jeff Gortmaker, and Gabriele La Spada comment, "In December 2015, the Federal Reserve tightened monetary policy for the first time in almost ten years and, over the following three years, it raised interest rates eight more times, increasing the target range for the federal funds rate from 0-25 basis points (bps) to 225-250 bps. To what extent are changes in the fed funds rate transmitted to cash investors, and are there differences in the pass-through between retail and institutional investors? In this post, we describe the impact of recent rate increases on the yield paid by money market funds (MMFs) to their investors and show that the impact varies depending on investors' sophistication."

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Crane Data's latest Money Fund Market Share rankings show assets were up again for almost all U.S. money fund complexes in August. Money fund assets increased by $85.9 billion, or 2.3%, last month to $3.707 trillion. Assets have climbed by $207.0 billion, or 5.9%, over the past 3 months, and they've increased by $637.2 billion, or 20.8%, over the past 12 months through August 31, 2019. The biggest increases among the 25 largest managers last month were seen by Fidelity, Federated, JP Morgan, Goldman Sachs, SSGA and Schwab, which increased assets by $29.1 billion, $12.4B, $12.1B, $10.5B, $7.9B and $6.4B, respectively. Declines in assets among the largest complexes in August were seen by Invesco, Dreyfus, Vanguard and BlackRock, which decreased by $9.4B, $2.8B, $1.3B and $0.5B. Our domestic U.S. "Family" rankings are available in our MFI XLS product, our global rankings are available in our MFI International product. The combined "Family & Global Rankings" are available to Money Fund Wisdom subscribers. We review the latest market share totals below, and we also look at money fund yields, which moved lower in August.

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The September issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Monday morning, features the articles: "Sweeps Get Messy: Fidelity vs. Schwab; Lawsuit," which reviews the recent attention around money funds vs. FDIC sweeps; "FIS SGN's Vogel & Borchardt on Portals, Tech and Reforms," which profiles the portal formerly named SunGard; and, "MFI Intl Shows Euro Assets Jumping Despite Negative," which discusses assets and issues in "offshore" or European money market mutual funds. We've also updated our Money Fund Wisdom database with August 31 statistics, and sent out our MFI XLS spreadsheet Monday a.m. (MFI, MFI XLS and our Crane Index products are all available to subscribers via our Content center.) Our September Money Fund Portfolio Holdings are scheduled to ship on Wednesday, Sept. 11, and our Sept. Bond Fund Intelligence is scheduled to go out Monday, Sept. 16.

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Money fund assets rose this week, after falling the prior week due to month-end. MMFs have risen in 18 out of the past 20 weeks and are at again at their highest levels since October 2009. ICI's latest "Money Market Fund Assets" report shows that assets have increased by $333 billion, or 10.9%, year-to-date. Over the past 52 weeks, ICI's money fund asset series has increased by $500 billion, or 17.3%, with Retail MMFs rising by $231 billion (21.8%) and Inst MMFs rising by $269 billion (14.7%). We review ICI's latest asset totals, as well as Crane Data's latest onshore and offshore asset information below.

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