They were wildly off. For while the rate cuts came and stocks soared, companies and households have kept shoving cash into money funds, pushing the total assets held in those accounts above US$7 trillion ($9.41 trillion) this week for the first time ever. The relentless rush into those funds — which buy Treasury bills and other short-dated instruments — underscores just how attractive benchmark rates above 5% have been for an investor base that had grown accustomed to them being closer to 0% this century.
It was supposed to be the year of the great money-market exodus.
Between Federal Reserve interest-rate cuts and the rally in stocks and bonds that would naturally follow, all the elements were there, Wall Street prognosticators said, to prompt investors to yank cash out of money-market funds en masse.
