U.S. money market funds attracted $47.7 billion in the week ending July 1, pushing total assets to a record $7.95 trillion, according to data released Thursday by the Investment Company Institute (ICI).
This inflow marked the largest weekly figure since the week ending June 3. Total net assets rose from $7.9 trillion the previous week, representing the seventh increase in the last nine weeks.
Assets of government funds, which primarily invest in Treasury bills, repurchase agreements, and debt securities of government agencies, climbed to $6.56 trillion, up by $34.1 billion. Prime fund assets, which allocate capital to commercial paper and other higher-risk instruments, increased to $1.24 trillion, gaining $11.4 billion.
ICI’s data excludes internal corporate money funds. Crane Data LLC, which tracks a broader universe of money funds, reported that total assets stood at $8.326 trillion as of June 26, rising by $14 billion from the prior week.
Money market funds are drawing growing investor interest after Federal Reserve officials signaled the possibility of an interest rate hike in the coming months. According to interest rate swap market data, following Thursday’s employment report release, traders estimated about a 20% probability of a rate hike at the July meeting—down from 33% before the data came out. Traders priced in 31 basis points of Fed rate increases by December, implying expectations of more than one quarter-point hike.
Corporate treasurers often shift funds from direct securities into money market instruments to capture yield—a trend that was expected to persist until geopolitical tensions in the Middle East began impacting inflation expectations.
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