Money market funds outlook for 2024
2 min read
2023-12-26 09:41:00
All news and articles are copyrighted to the respective authors and/or News Broadcasters. VIXC.Com is an independent Online News Aggregator
Read more from original source here…
Next year should be another good one for money market funds, even amid anticipated rate cuts by the Federal Reserve, experts predict. The assets became a favorite place for Americans to stash cash this year, thanks to their historic yields. The annualized 7-day yield on the Crane 100 list of the 100 largest taxable money funds is currently 5.19% It was 4.05% on Dec. 31, 2022, and 0.17% on Dec. 31, 2021, according to Crane Data, a firm that tracks money markets. Inflows ramped up as well. An estimated $950 billion has flowed into money market funds so far this year, bringing the total net assets to $5.87 trillion as of Dec. 20, according to the Investment Company Institute . The Federal Reserve has indicated three rate cuts for 2024, which means the yields in short-term assets like money market funds and online savings accounts will follow suit. While it’s unclear when those cuts may start, fed funds futures pricing data suggests about a 76% probability that rates will decrease by 25 basis points in March, according to the CME FedWatch Tool . “Even if the Fed is going to ease, it is going to be very measured, very controlled,” said Shelly Antoniewicz, deputy chief economist at the Investment Company Institute. “Short-term yields may be a little lower, but will remain very attractive.” Peter Crane, founder of Crane Data, expects yields to go down at most to 4% by the end of 2024. “With lower inflation rates, that is not exactly a bad deal,” he said. He anticipates retail money will continue to flow into the funds, even though some may drift back to the stock and bond markets. That’s because money market funds are competing with bank savings accounts for cash, not necessarily equities and fixed-income assets, he said. “Even if the Fed cuts a number of times, the spread between bank deposit yields and money market funds yield will still be huge,” Crane said. “The table will still be tilted in favor of money funds over bank deposits.” The funds that Crane tracks have…
2023-12-26 09:41:00
All news and articles are copyrighted to the respective authors and/or News Broadcasters. VIXC.Com is an independent Online News Aggregator
Read more from original source here…