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Banking crisis pushed over $286B to money market funds in two weeks: Report

by Russ Turner
March 26, 2023
in Cryptocurrency
Reading Time: 2 mins read
Banking crisis pushed over $286B to money market funds in two weeks: Report

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The banking crisis has caused many investors to rotate their portfolio investments in the past two weeks, with more than $286 billion transferred to US money market funds so far in March, according to EPFR data. obtained By Financial Times.

The figures show that Goldman Sachs, JPMorgan Chase and Fidelity are the top winners among investors who have poured heavily into US money market funds over the past two weeks. Goldman Sachs money funds grew 13% and he received $52 billion, while JP Morgan funds poured in almost $46 billion and Fidelity saw almost $37 billion inflows, he said. says FT. The influx is the highest in a month since the Covid-19 outbreak began.

Money market funds typically offer high liquidity and low risk, making them a popular choice for investors during uncertain times. Now, as the US Federal Reserve continues to raise interest rates to keep inflation in check, these funds are offering their best yields in years.

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money market fund assets.Source: Research Institute of Investment Corporation

Total Assets of Money Market Funds for the 7 Days Ending March 22nd gain It increased from $117.42 billion to $5.13 trillion, according to the Investment Company Institute report. Among taxable money market funds, sovereign wealth funds increased $131.84 billion and prime funds decreased $10.83 billion. Tax-free money market funds decreased by $3.61 billion.

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Money market fund inflows are driven by concerns over the health of the financial system as US and European banks face liquidity constraints amid tightening monetary policy.

Deutsche Bank shares fell on March 24 as premiums increased for potential default risks. His 5-year credit default swaps for German banks, known as CDS, rose 19 basis points (bps) from the previous day to close at 222 bps. according to To Reuters, citing data from S&P Global Market Intelligence.

In the U.S., uncertainty still looms over regional banks as default insurance for financial services firms Charles Schwab and Capital One surged last week.