06.28.19
Money Market Funds Contemplate a Return to Abyss of Low Rates
by: Alex Harris
The amount of assets held in taxable money market funds has risen back above $3 trillion for the first time in close to a decade, but there is growing disquiet within the industry about the problems that might be caused by potential rate cuts from the Federal Reserve. Treasury yields that veer closer to zero could prompt those with spare cash to seek out alternatives, and may also make the job of running the funds more difficult. Possible central bank easing is “not a death sentence, but it spells reduced margins and potential losses for the industry,” said Deborah Cunningham of Federated Investors. “It's the fear of the unknown. Is it 50 basis points? Is it a program that takes us back to zero?”
Read the full article on Bloomberg