US money market fund assets have hit their highest level since October 2009, as investors piled more cash into these low-risk products despite a lessening of concerns about US-China trade tensions, a private report released on Wednesday said. Assets of money funds, which are seen as being nearly as safe as bank accounts, climbed by $24.57 billion to $3.355 trillion in the week ended Sept. 10, the Money Fund Report said.
This brought their year-to-date increase in fund assets to about $385 billion. Money funds are offering investors higher yields than some Treasury maturities. That, however, would change if the Federal Reserve reduces borrowing costs further to counter deteriorating business activity and the trade conflict between the world's biggest economies. The Fed cut interest rates for the first time since 2008 in July. The interest rates market signaled traders are prepared for another rate decrease at the Fed's upcoming meeting later in September.
Taxable money fund assets climbed by $24.12 billion to $3.220 trillion, while tax-free assets increased by $443.5 million to $135.07 billion, the report, published by iMoneyNet, showed. The iMoneyNet average seven-day simple yield for taxable money funds dipped to 1.75% from 1.76% the previous week. The weighted average maturity among taxable funds was lengthened by one day to 32 days. The iMoneyNet average seven-day yield for tax-free and municipal funds fell to 0.91% from 0.97%. The weighted average maturity of tax-free funds grew one day to 34 days.
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