As anyone who keeps tabs on markets is aware, inflows to cash are largely unabated.

This is the never-ending story. Last week, for example, US money funds took in more than $28 billion. That was on the heels of a very large $53 billion the week prior.

Total assets in US money funds, according to ICI, now stand at a record $6.22 trillion.

For 2024, the YTD inflow is almost $330 billion. Since the beginning of 2023 — i.e., capturing the inflows around America’s regional banking mini-crisis — that figure’s a remarkable $1.48 trillion.

The consensus narrative says institutional money and corporate cash piles will continue to find their way into government money funds for the foreseeable future, or at least for the balance of the year. Institutional funds are also getting a fillip from rule changes.

But eventually, as the Fed starts to cut, and assuming there isn’t some manner of cataclysm that triggers a new flight to cash, some of this money will find its way off the sidelines. And make no mistake, it is a lot of money. Inflation or not, a trillion dollars still goes a long way.

As the figure above, from Goldman, shows, there’s nearly $9 trillion parked in money funds globally.

Where’s that gonna go assuming it ever gets put to work doing something other than collecting a very handsome, risk-free yield? That’s the… well, it’s the $9 trillion question.

If you ask Goldman’s Scott Rubner, the answer’s IG credit first. Which is intuitive. If you’re going to venture out into the “wild” to make up for any yield lost to the first tentative decline in short-end rates, you’ll start conservative in blue-chip corporate debt. Do note: IG debt funds have already seen enormous inflows.

After that, Rubner mused, it’ll be high quality US shares and min vol stocks.

As for the timing, he suggested the moment’s close at hand. “Money market yields are starting to materially decline,” he wrote Monday. “My view is that this mountain will start to get deployed elsewhere after the US election.”

The section of his Monday dispatch dedicated to MMFs was called “Straight Cash Homie.”