Money market fund AUM retreated from record highs in the week to September 20, data released late Thursday in the US showed.

The $7 billion outflow was the first in almost a month and came on the heels of a near $74 billion influx over the prior three weeks.

Total assets were $5.636 trillion as of Wednesday, just below the all-time high set a week ago.

The outflow was down to institutional government, which saw $13.2 billion hit the exits. Retail inflows were $3 billion in government funds and more than $6 billion to prime products.

Money market funds are set for a record year of inflows. Globally, money funds are on track for some $1.5 trillion in new assets in 2023. Inflows to US money funds for the year stood at $901 billion midway through this week.

The MMF-RRP-T-bill nexus is still topical, although it’s not grabbing as many headlines as it did in the immediate aftermath of the debt ceiling deal. Treasury’s cash balance rose to a one-year high this week on tax-related flows and coupon settlements.

The prospect of an additional rate hike from the Fed may impact money funds’ willingness to rotate out of the RRP facility. On Thursday, investors favored four-week bills at auction over eight-week bills, presumably because the latter’s maturity comes after the November FOMC meeting.

RRP balances stood at $1.454 trillion on Thursday, up from a 22-month low of $1.4 trillion late last week, when usage retreated amid money fund outflows for quarterly corporate tax payments and mid-month auction settlements.

Meanwhile, borrowing from the Fed’s Bank Term Funding Program actually fell this week. At $107.599 billion, usage was the lowest since late last month.

Discount window borrowing, though, rose back above $3 billion to the highest since early July. That left total borrowing between the backstops virtually unchanged at $110.7 billion.

“The fact that Bank Term Funding Program utilization remains elevated suggests there will be little urgency to wind down the program any time soon,” BMO’s Ian Lyngen and Ben Jeffery recently remarked. “It’s worth mentioning that the favorable conditions of the BTFP also don’t necessarily imply that every dollar withdrawn is absolutely necessary, but as lending and credit evolves, this will remain a space to watch.”