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Battered Money-Market Industry Is Ready for Aggressive Fed

  • More funds’ weighted average maturities are less than 10 days
  • Odds of a 50 basis-point March rate increase is just over 50%
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What to Expect From the Fed Minutes
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While the global financial system waits for the Federal Reserve to begin lifting interest rates, funds across the money-market industry are positioning their cash to take advantage of the higher yields to come.

For some funds that means shortening exposure to interest-rate shifts in their portfolios. As of Feb. 14, more than 100 money markets funds had a weighted average maturity, or WAM, of 10 days or less, including some Federated Hermes funds at 1 day, according to money-market information provider Crane data. That’s up from 85 funds on Jan. 24 and 77 at the end of December.