American investors lead to Money Market funds to US $ 7.5 billion

More and more American investors are taking advantage of MONETARY MARKET Funds (Money Market) To put to work their savingswhat is taking the size of the segment to a record.

According to the data collected by Crane datainvestors already invested US $ 320,000 million in these financial vehicles so far this year, mainly for The monetary policy adopted by the Federal Reserve (FED).

As the agency did not cut interest rates throughout 2025, now the simple annualized performance of seven days is 3.95% for government and $ 4.03 funds for prime, according to Bank of America.

“The rates greater than 5% were the Nirvana, some rates above 4% remain very good, and if we lower to a high level of 3%, it is also quite acceptable,” he said Deborah CunninghamDirector of Investments for Global Liquidity Markets in Federated Hermes

For this reason, the Executive considers that the current size of the Money Market Funds Sector of U $ S7 billion could “Easily become US $ 7.5 billion in 2025”.

Money Market funds do not stop growing

The funds were accumulating large capital volumes in recent years, initially driven by their attractive as shelter sure during the uncertainty of early 2020, and again for The increase in yields as the Fed deepened its cycle of rates.

Even when the Fed began to cut them last year, These vehicles continued to capture assetssince they usually reflect the effects of rates reductions more slowly than banks.

In addition, US households were essential in capital flow. Since March 2022, Assets managed by monetary funds in the United States increased by $ 2.5 billionwith retail investors contributing about 60% of that total, according to the Investment Company Institute.

“It is not surprising that assets levels have been maintained and increased,” said Michael Bird, fund manager at AllSpring Global Investments. “Even if the Fed takes up its monetary flexibility campaign this year, interest rates will continue to be relatively high”he added.

According to the specialist, the funds are looking to extend the weighted average expiration of their portfolios (WAM) as much as possible higher yields.

At the same time, the managers adjusted their positions to mitigate the impact of the crisis around the roof of the United States debt, which approaches the US $ 40 billion.

Although most Wall Street strategists anticipate that The Government will raise the limit towards the end of July or the beginning of August through the legislative reconciliation processSome funds decided to increase their exposure to repurchase operations as a precautionary alternative.