Fed Rate Cuts to Spur $2 Trillion Money-Fund Exit, Apollo’s Slok Says
- Chief economist expects cash to flow to higher-yielding assets
- Total assets last week reached $7 trillion for first time ever
Torsten Slok
Photographer: Victor J. Blue/BloombergThis article is for subscribers only.
The steady stampede into money-market funds is likely to reverse as the Federal Reserve keeps pushing down interest rates, giving investors incentive to shift cash into higher-yielding assets, according to Apollo Global Management’s chief economist Torsten Slok.
“Where will the $2 trillion added to money market accounts go now that the Fed is cutting,” Slok wrote in a note to clients on Tuesday, citing the inflow to money-market funds since the Fed began raising rates in March 2022.