BofA Says Rush to Money Market Funds to Last as Fed Cuts Delayed

Investors are still flocking to cash funds, and Bank of America Corp. strategists say history suggests redemptions won’t begin until a year after the Federal Reserve starts cutting interest rates.

Money-market fund flows rose in anticipation of the first cut over the past five rate reduction cycles, before inflows slowed meaningfully when the central bank actually started cutting rates, a team led by Michael Hartnett wrote in a note. Outflows began 12 months later, they said.