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Money Market Funds Continue to Grow—and Grow

If you think the stock market is getting kind of pricey just wait until (or maybe I should say if) interest rates fall and the ever growing pile of cash in money markets starts the move into other vehicles–stocks, bonds, preferred stock etc.

Just today the Investment Company Institute released the latest money market balances in the U.S. and balances are now at $6.08 trillion!! This is trillions more than when the pandemic started and the government started shoveling money out the door–and it just keeps growing. Now it is pretty clear how all those 4-5% preferreds get back to $25–we’ll see over the next few years maybe (or who knows how long). There is plenty of fuel to power the rocket ship (equity markets).

Well we have the employment report today–maybe it will mean nothing to markets–one can not predict how markets move. 198,000 new jobs are forecast to have been added in February–this after 353,000 in January. It will be interesting to see if we get any giant revisions to the January numbers. The unemployment rate is forecast at 3.7% unchanged from last month with hourly wages moderating a bit to 4.4% from 4.5% (year over year). Of course yesterday we had the 1st time unemployment claims–right on target at 217,000–flat with last month.

Equity markets are green this morning–although not by much. The 10 year treasury is trading at 4.07%—so is it heading to 3.90%? We’ll have to wait and see because it is not predictable. These moderating rates have helped income portfolios, but only moderately – CD interest has been my best boost to balances this week.

Yesterday I bought (1) 3 month CD yesterday – the coupon was 5.3%. Today and weekly through the month I will be forced to ‘fish or cut bait’ or sit with cash – that won’t happen – no way I am leaving over 5% (at least) on the table – something will be bought.

23 thoughts on “Money Market Funds Continue to Grow—and Grow”

  1. Not sure where to post this so perhaps here. For those who like bank bonuses, Chase is offering up to a $900 bonus for opening a money market account ($15,000), opening a checking account ($300), and a $500 direct deposit. Assuming that the money is tied up for close to 4 months, that’s a yield in the area of 18%.

    1. Seems like Jaime Dimon wants cash quick. Your $900 bonus might eventually come from taxpayers so you might as well take any opportunity to pay yourself.

    2. Here is more info about chase in plain English in the link below. I have to admit it is appealing and I have done things like it before but it is a bit of work. I will have to give it some thought. Just a pain to follow the rules exactly and then keep watch when you can safely wind it all down. If you procrastinate every day lowers the overall yield. When one thinks about all the hours you spend with doing it ever so carefully I might have just been better off doing something else more productive with my time.


      The money market account seems to be a different offer. To get that one you are talking 100s of 1000s. You can see it on Chase’s website if you search google for “chase money market account”. It is a 700 max bonus.

      New money inflows Cash Bonus
      $5,000 to $24,999 $50
      $25,000 to $99,999 $150
      $100,000 to $249,999 $325
      $250,000 + $700

  2. Oct Nov treasuries have been around 5.20+ Ive pushed some out to Feb March.

    I’d gladly suffer a 4.50 rollover then not have money if rates hold. Much less rise!

  3. On my no-risk list: MMFs, CDs, treasuries, agency bonds. Not much discussion here of agencies. I own a 6.95% agency from October with 236 days left to first call. Why bother with CDs unless you need a predetermined exit and/or a guarantee? I buy agencies planning to HTM (or I KTB).

  4. Picked up a Bank of America 5.25%, Quarterly pay, CD offering from TDA just now. Call protected until Sept.

  5. all that MM is sitting on the sidelines. I hate that. Not on the sidelines for this chicken. I want it there, How long? Until the “experts “ stop calling it that.
    Jobs numbers? I don’t believe any of it.

  6. Revealed! The Future! The Fed’s Hidden Agenda! Here –

    Not exactly a crystal ball, but a practical reference tool if you’re looking to lock in rates that are still levitating awaiting the start of cuts and are shopping around for CDs beyond a year or longer term debt of varying maturities (for me 5- 8 yrs comfort zone) with call / no call features. Beyond 1 year is scary for me. I always wonder what rate to accept at the long end.

    The feather like object mid-page is a good starting point for me, easier than jumping around from page to page the CME monthly predictor to the SOFR page to the 10y – 2year -1 year – 6month – 3month Treasury charts on Yahoo.

  7. This question is off the subject but does anyone know when the new issue at 7.250 for Athene Holding is coming out and if it is over the counter for now. I called Fidelity and they can’t find it listed anywhere – thank you

    1. Dyan,

      I’ve seen posts here on III stating that new issues of debt only begin trading on an exchange, and they begin with their permanent symbol. ATHS is debt.

      New preferreds often trade OTC (and with a temporary symbol) before moving over to an exchange (and begin trading with their permanent symbol).

      As a result, new preferreds often begin trading within a day from their pricing, while new baby bonds (e.g., ATHS) usually take at least several days before they begin. I expect it will begin early next week.

      From the company’s 424B5 prospectus, filed March 4th:
      We intend to apply to list the debentures on the NYSE under the symbol “ATHS.” If approved for listing, trading of the debentures on the NYSE is expected to commence within 30 days after they are first issued.

      Tim’s page on the new issue:

    2. Its long in peoples accounts but I see no trading. Its priced at 25, w no up or down. Which means its still in limbo. I haven’t tried to get a bid ask though…..

      Why these are so screwed up is unknown to me. The Fords issues took almost 60 days!!!

  8. Tim-
    4-week T-Bills still at 5.39%. Easy to buy through Treasury Direct or your broker, especially if your broker is Schwab.

    1. Numbers
      Depending on your outlook for interest rates in the future, you can get 3 mos T’s for 5.37% and 6 mos for 5.29% (FIDO)

      Why not go longer?

      1. The outlook for interest rates is the key. I want to see some further clarification from the Fed as to the course they are likely going to take.

        I don’t see inflation coming down to their target any time soon, if ever. I think the markets are overly optimistic in pricing in 3 rate cuts this year. One or zero cuts in 2024 are a very real possibility. I prefer to stay real short for now.

  9. Unemployment ticked up to 3.9% I think this number can be relied upon and not manipulated by the dept of Labor. But the announcement of 275,000 new jobs in non farm payroll I don’t trust especially with this announcement.

    In addition to the 124K downward revision in January’s nonfarm payroll number, December’s was revised down by 43K to 290K. With those revisions, employment in the December to February period is 167K lower than previously reported, the DOL said.

    1. Yep, more big downward revisions. That is like about 22 out of the last 24 months You can’t trust these numbers – we are being lied to every month on the employment numbers

  10. A lot of that money came from the banking system, so I don’t think it’s risk capital. It stayed in the banking system at very low yields for a very long time. Just as those bank deposits were sticky I think it will stay in the money funds unless it can get a significantly better yield in an equally safe asset.

    1. This is an good point. What is the source of this money? If it is just a transfer from checking and saving accounts into money market funds, then I question whether there is an indication that this money will suddenly be invested in the future.

      Time will tell.

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