A few days ago, while summarizing and otherwise closing the book on another remarkable year for money market fund inflows, I noted that the last time cash posted comparable back-to-back returns (i.e., consecutive years of returns at or around 5%) was 2006-2007, and before that 2000-2001.

Maybe that’s ominous maybe it isn’t, but my point wasn’t to suggest a cataclysm’s in the offing, although I’d be remiss not to remind readers that Fed hiking cycles (almost) always end in tears for someone, somewhere.

Rather, I meant simply to contextualize the $2 trillion of inflows to MMFs since January of 2023. Cash just experienced a renaissance. For the first time in many young Wall Streeters‘ professional careers, it (cash) was viable again as an asset class.

In 2024, cash outperformed, among other things, commodities, REITs, global IG credit and, of course, US Treasurys, which were teetering on the brink of a third loss in four years with just two business days left on the calendar. Bonds may yet eke out a gain, but it was gonna be close.

Some of you may recall that while it’s exceedingly rare for Treasurys to notch losses in three of four years, it’s not unheard of. It happened during the 1955-1958 period, for example.

With all of that in mind, and as a sort of addendum to “What’s Wrong With The Bonds?” published earlier today, the figure below’s worth a look.

The cumulative superiority of cash (i.e., T-Bills and ultra-short US government paper) versus US Treasurys is enormous over the last four years.

As The Wall Street Journal noted, in a piece published over the weekend, ICE’s index of US Treasurys was set to underperform T-bills for a fourth consecutive year, while Bloomberg’s widely-tracked US Aggregate Index, which also tracks IG corporate paper and MBS in addition to Treasurys, has returned a paltry 1.1% this year, nowhere near cash’s 5.2% and that “after barely outperforming T-bills in 2023 and falling short the previous two years.”

Of course, the juicy 5% you could’ve earned on sleep-well-at-night USD cash is “just shy” of the 25% you could’ve scored in US equities, to say nothing of Bitcoin’s — checks notes — 122% 2024 gain. Whether you could sleep at all, let alone “well,” with a(ny) meaningful portion of your assets in Bitcoin’s a matter of personal risk tolerance.