Investors poured $367 billion into U.S. money market funds in March, according to data provider EPFR, as the collapse of Silicon Valley Bank and concerns over the economy led investors to seek safety in cash. This marked the largest monthly inflow for U.S. money market funds since October 2008. Money market funds are a popular choice for investors seeking safety and liquidity, as they invest in short-term, high-quality debt securities.
The banking industry in the United States is still struggling after the collapse of three major banks. According to statistics, bank lending has decreased significantly since the financial crisis, leading to a decrease in economic activity. As a result, investors are turning to money market funds as a safe haven for their cash.
Money market accounts (MMAs) are a good choice for savers seeking account flexibility in addition to potentially higher interest rates than traditional savings accounts. MMAs typically offer check-writing privileges and ATM access, allowing savers to easily access their funds while still earning interest.
U.S. money market funds drew inflows for a fourth straight week on worries about an economic slowdown after data pointed to slowing growth in China and Europe. The inflows were primarily driven by institutional investors seeking safety in cash.
Wall Street investors were net buyers of fund assets which included both exchange traded funds (ETFs) and conventional funds for the sixth straight week. This trend suggests that investors remain cautious about the state of the economy and are seeking safety in cash.
Global money market funds continued to attract strong inflows in cautious trade in the week ended April 5 as a raft of economic data during the week highlighted the fragility of the global economy. The inflows were primarily driven by institutional investors seeking safety in cash.
Cash is fleeing bank deposits for money-market funds, but much of it may remain in the banking system. Since Silicon Valley Bank collapsed, many depositors have been moving their cash into money market funds, which offer higher yields and liquidity. However, much of this cash may still be invested in the banking system, as many money market funds invest in short-term debt securities issued by banks.
Global money market funds continued to attract strong inflows in cautious trade in the week ended April 5 as a raft of economic data during the week highlighted the fragility of the global economy. The inflows were primarily driven by institutional investors seeking safety in cash.
Banks are under pressure from depositors' embrace of money-market funds, pushing a popular Federal Reserve-sponsored financing program into the red for the first time in years. The program, known as the overnight reverse repo facility, is designed to drain excess cash from the financial system by allowing banks to lend their cash to the Fed overnight in exchange for Treasury securities.
