The money market fund industry is high if the Federal Reserve keeps the interest rates stable.
Bloomberg, with reference to info from Crane Data LLC, report That the amount of the capital that has been invested in the money market industry has now risen to a record of $ 7.4 trillion, with $ 320 billion that has been flows into the funds so far.
Money market funds are financial instruments with which people can invest in debts with a lower risk and short -term debts, including American treasury.
Deborah Cunningham, Chief Investment Officer for global liquidity markets at Federated Hermes, says Bloomberg says that the current monetary policy choices of the Federal Reserve suggest that the money market industry could continue to grow this year and easily stretch up to $ 7.5 billion in Activa.
“Five percent-plus rates were Nirvana, four percent-plus is still very good and when we dive into the high three, that is also quite acceptable.”
The Federal Open Market Committee (FOMC) announced Last week it intended to maintain the target range for the federal funds at 4.25-4.5%, with the argument that this was the most suitable level to achieve both maximum employment and controlled inflation. The FED has kept the interest rates stable since December if it reduced the rate by 0.25%.
Michael Bird, senior fund manager at Allspring Global Investments, says Bloomberg that it is “not surprising” that the assets levels in the money market sector have grown.
“Even if the FED picks up its relaxation campaign this year, the rates will still be relatively high …”
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