Investing.com — US money market funds attracted $47.7 billion in the week ending July 1, pushing total assets to a record $7.95 trillion, according to Investment Company Institute data released Thursday.
The inflow marked the largest weekly increase since the week ended June 3. Total net assets rose from $7.9 trillion in the prior week, representing the seventh gain in nine weeks.
Government funds, which invest primarily in Treasury bills, repurchase agreements and agency debt, saw assets climb to $6.56 trillion, a $34.1 billion increase. Prime funds, which invest in commercial paper and other higher-risk assets, rose to $1.24 trillion, an $11.4 billion gain.
The ICI data exclude firms’ internal money funds. Crane Data LLC, which tracks the broader money market industry, reported total assets of $8.326 trillion as of June 26, up $14 billion from the previous week.
Money market funds have attracted increased investor interest after Federal Reserve officials signaled expectations for an interest rate hike in the coming months. Rate swaps showed traders pricing in about a 20% chance of a rate increase at the July meeting following Thursday’s jobs report, down from 33% before the data was released. Traders priced in 31 basis points of Fed rate increases by December, implying expectations of more than one quarter-point hike.
Corporate treasurers often rotate from direct securities into cash products to capture yield, a trend expected to continue before geopolitical turmoil in the Middle East affected inflation expectations.
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