“Not only do money-market funds tend to experience a surge in seasonal inflows during this time of year, supporting higher AUMs, but money-market fund outflows also typically do not occur until the Fed is further along in its easing cycle,” JPMorgan strategists Teresa Ho and Pankaj Vohra wrote in a Friday note to clients.
A record pile of cash sitting in money-market funds is set to get even bigger by the end of the year even as the Federal Reserve starts to slash interest rates, according to JPMorgan Chase & Co.
US money fund assets have steadily surged this past year, now at some US$6.3 trillion, according to the latest Investment Company Institute data through Sept 4 — up by US$165 billion ($215.65 billion) amid a recent five-week run of inflows. Investors seeking high returns have flocked to the funds as they offer attractive yields brought on by the Fed keeping rates, currently at a two-decade high, steady this past year.
