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Money Funds See Second Week Of Outflows. Fed Backstop Borrowing Jumps
Don't look now, but money market funds just a saw a second straight weekly outflow.
To be sure, $16 billion is a drop in the bucket. Money funds took in almost $1.2 trillion in 2023. But market participants are warming to a narrative that says the mountain of sideline cash parked in MMFs can be a source of funds for a 2024 equity rally.
Redemptions over the last two weeks sum to $27.6 billion. Again, that's a rounding error, and it's never a great idea to draw conclusions based on anything tha
I’m reading there is an attractive spread between interest paid on BTFP balances and interest received on bank reserves at the Fed.
You would think with the drop in yields, banks holding low-yielding bonds on their balance sheets would be in better shape than they were a few months ago and need less use of the BTFP facility. This comment might explain why that isn’t the case.