The interest rate of over 5% attracts a large amount of capital. The assets of the US money market funds reach a historical high.

With interest rates exceeding 5% and uncertainty about the direction of monetary policy, cash inflows from banks and other investors have led to a historical high in money market fund assets. According to data from GMTEight Source, the Investment Company Institute, in the week ending August 16th, approximately $40 billion flowed into US money market funds. Total assets reached $5.57 trillion, an increase from the previous week's $5.53 trillion. As the US 30-year bond yield reaches its highest point since 2011, elastic economic data challenges the notion that interest rates may have reached their peak. The higher yields and doubts about economic prospects have prompted numerous investors to turn to the forefront of the market, where they can earn over 5% returns on risk-free assets like Treasury bills. Investors have been pouring into money funds since the Federal Reserve embarked on one of the most aggressive tightening cycles in decades to quell runaway inflation. Last month, FOMC officials raised the key policy rate to between 5.25% and 5.5%, the highest level in 22 years. Money funds have been quicker than banks to pass on these benefits to investors. In the week ending August 16th, government fund assets rose to $4.59 trillion, an increase of $37 billion. These funds primarily invest in securities such as Treasury bills, repurchase agreements, and agency debt. Meanwhile, the main funds primarily invested in higher-risk assets like commercial paper saw their assets rise to $870 billion, an increase of $5.1 billion.