Money market funds emphatically snapped a two-week streak of outflows with a large haul that pushed total assets to a new record high, an update released late Thursday in the US showed.

The $41.7 billion inrush in the week to January 31 was the largest in five weeks and pushed MMF AUM above the $6 trillion threshold for the first time.

The milestone came during a week when Treasury outlined its borrowing plans for the quarter and the Fed pushed back against market speculation for a rate cut as soon as March.

The lion’s share of the inflows were to institutional government, but all categories took in money.

The TBAC minutes that accompanied the refunding announcement showed dealers generally believe MMFs won’t see large outflows even in the face of lower short-term rates. Money funds, the minutes said, will “continue to be a meaningful investor” in bills in 2024.

Opinions vary on when MMFs will sustain durable redemptions and where that money will go once it leaves the safe confines of 5%-yielding cash.

Note that RRP balances fell to just $503.5 billion on Thursday.

The drain since the debt ceiling deal now comes to $1.66 trillion.

Jerome Powell this week suggested the Fed had a preliminary discussion about tapering QT at the January meeting, but said it’ll be March before the serious debate gets going. Some market participants believe the Fed should end QT before RRP is fully drained. If you subscribe to that view, you might argue the Fed’s running late when it comes to actively debating taper parameters.

Meanwhile, Bank Term Funding Program usage posted its first decline since November 29, the day after Chris Waller tipped the Fed’s dovish pivot, igniting the easing bets which pushed the facility rate below the rate the Fed pays on reserves, handing banks an arbitrage opportunity.

Last week, the Fed slammed the door shut on what The Economist aptly derided as a “free money machine.” Loans through the facility prompted fell.