Haves, Have-Nots And The Term Premium

Earlier this week, I noted that money market funds are throwing off an estimated $22 billion in monthly interest income. Notwithstanding an anomalous outflow over the latest weekly reporting period, savers of all shapes and sizes funneled cash into money funds at an unprecedented rate in 2023. Money fund AUM is up more than $1 trillion over 12 months. That cash pile is earning in excess of 5%, risk free. For households, that's extra income. It's a windfall. It you refinanced your mortgage in 2