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Money Fund Assets Hit Another Record. RRP Lowest In 17 Months
Money market funds took in $14.37 billion in the week to August 30, data released late Thursday in the US showed.
The respectable haul marked a return to inflows following a net $1 billion redemption during the prior week.
It was the sixth inflow in seven weeks. Money funds took in a net $128.9 billion over that stretch.
This week's influx came courtesy of $10 billion to institutional government funds and $3.4 billion of retail flows to prime products.
Total assets hit a new record at $5.5
Guess we’re not going to see the August fireworks Mike Wilson warned about:
“[F]iscal support is likely to turn into a 2% drag starting in August [which] would amount to an approximately 6% drag to nominal GDP growth over the next 12 months,” Wilson said, citing Morgan’s rates team again. “Given the recent debt ceiling deal that puts caps on additional fiscal spending, this seems like a major headwind to growth that many aren’t baking into their estimates.” He suggested that even a relatively modest additional decline in reserves associated with the TGA rebuild could be a “wake-up call” for an equity market which appears to be ignoring not only the more challenging fiscal outlook in the US, but also the less favorable backdrop for USD M2 growth globally. “Either global M2 growth is about to surge or else stocks have a long way to fall to get back in line with this metric,” Wilson remarked, referencing the figure on the left.