US Rates Strategy: 2025 US Rates Outlook
At Any Rate
Money Market Funds Outlook
- Money market fund assets under management (AUM) are expected to remain high in the coming year.
- Historical analysis of past easing cycles suggests that outflows from money funds typically lag, not coinciding with the start of Fed easing.
- Money funds remain appealing compared to bank deposits due to banks' low incentive to raise deposit rates and preference against non-operational deposits.
- A flat yield curve further reduces the motivation for investors to seek higher returns by taking on duration risk.
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