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MMF AUM Edges Closer To $6 Trillion. RRP Still Falling. BTFP Hits $147 Billion
Money market fund inflows slowed after a massive haul around the calendar flip, but total AUM nevertheless notched another new record in the week to January 10.
MMFs took in $9.99 billion over the latest weekly reporting period, data out late Thursday in the US showed.
The new AUM high mark was entirely attributable to an $11.4 billion inflow to prime funds. On the government side, $2.4 billion in retail redemptions offset a small institutional inflow.
Total assets now stand at $5.975 trill
I have been skeptical about how much of the $6TR MMF is actually “dry powder”.
MMF shot up in 2020, then was somewhat stable for most of 2021, then went up by another about $1TR from 3Q21 to now.
Since investors were pretty bullish in 3Q21, I’d call just the $1 TR rise since then classic investor “dry powder” i.e. cash temporarily on the sidelines and itching to jump back into securities. The rise before then was perhaps for other reasons – corporates raising cash levels for business uncertainty, pandemic household savings, or something.
I’m guessing, of course. Where is Zoltan when you need him?
https://fred.stlouisfed.org/graph/fredgraph.png?g=1dYre
Bank deposits fell by about $1 TR from the peak in 2Q21 to now.
https://fred.stlouisfed.org/graph/fredgraph.png?g=1dYtv
I don’t think cash that was sitting in bank deposit accounts before moving to MMF is clearly dry powder cash itching to be spent on securities. Some, but not all.
So maybe some part of $1 TR is classic dry powder. Half a trillion?