Money market funds assets remained near record highs in excess of $5.71 trillion in the week to October 11, data released late Thursday in the US showed.

Retail inflows of $12 billion split almost evenly across government and prime funds mostly offset $12.75 billion in outflows from institutional government.

The minuscule net outflow, $1.57 billion, came on the heels of a massive $64 billion haul the prior week.

YTD, net inflows to US money funds are $971.5 billion.

Analysts are still loath to call a top for money market fund AUM. Rates are the most attractive in decades and as long as you can stomach being on the sidelines for equity rallies, cash is very attractive as an asset class.

As ever, the MMF-RRP-T-bill nexus remains topical. RRP balances dropped to $1.157 trillion on Thursday, the lowest in over two years.

Balances are ~$1 trillion lower versus levels seen just before the debt ceiling deal in early June.

Suffice to say the RRP-Bill transformation dynamic is ongoing. RRP yields 5.30%. Treasury sold four- and eight-week bills on Thursday at 5.325% and 5.345%, respectively. Both sales stopped below the WI, and why wouldn’t they? They’re yielding more than RRP. When that’s the case, demand will be there, particularly when the odds of another Fed hike are waning.

“The significant reduction in reverse repos by MMFs to absorb the very large amount of issued T-bills… explains the surprisingly benign picture for US bank deposits and broad liquidity since May,” JPMorgan’s Nikolaos Panigirtzoglou remarked, in the course of suggesting the liquidity backdrop could be more challenging in 2024.

Meanwhile, borrowing from the Fed’s Bank Term Funding Program rose fairly sharply in the week to Wednesday. The $1.219 billion week-to-week increase was the largest since July 26.

Discount window usage dropped to the lowest in a month.

Overall borrowing from the backstops was $111.464 billion, the highest since April 26.