Yield on U.S. Taxable Money Fund Slips
The average yield on U.S. taxable money market mutual funds fell this week below 1.25% for the first time ever, as short-term interest rates remain stuck at lows not seen since President Kennedy occupied the White House.
The average seven-day simple yield on taxable funds fell to 1.24% in the week ended Tuesday, from 1.26% the prior week, according to the Money Fund Report, published by IMoneyNet Inc. of Westborough, Mass. The average compound yield fell to 1.25% from 1.26%.
The average seven-day simple and compound yield on tax-free funds held steady at a respective 0.83% and 0.84%, the report said.
Money fund yields are closely tied to the Federal Reserve’s target overnight lending rate, the federal funds rate, now at a 40-year low of 1.75%.
Overall money fund assets sank $19.8 billion in the latest week to $2.205 trillion.
Retail investors pulled nearly $7.5 billion of cash, or more than 1% of assets, from first-tier taxable money funds, leaving assets at $679 billion.
Inside the business of entertainment
The Wide Shot brings you news, analysis and insights on everything from streaming wars to production — and what it all means for the future.
You may occasionally receive promotional content from the Los Angeles Times.
