(Bloomberg) -- Money-market fund assets rose to an all-time high, led by inflows into the government sector as investors sought to protect their cash at the end of the year.
About $78.6 billion flowed into US money-market funds in the week through Jan. 3, according to Investment Company Institute data. Total assets rose to $5.965 trillion from $5.89 trillion the week prior.
Retail investors have been piling into money funds since the Federal Reserve began one of the most-aggressive tightening cycles in decades in 2022. But last month, the Fed signaled that campaign is over and projected deeper interest-rate cuts this year.
For the third straight meeting, Fed officials last month kept their main policy rate unchanged, between 5.25% and 5.5%, the highest in 22 years. Minutes from the December gathering showed policymakers concluded progress had been made in reining in inflation but reaffirmed that it would be appropriate for policy to remain at a restrictive stance for some time until inflation was clearly moving down sustainably.
In a breakdown for the week to Jan. 3, government funds — which invest primarily in securities like Treasury bills, repurchase agreements and agency debt — saw assets rise to $4.878 trillion, a $64.7 billion increase. Prime funds, which tend to invest in higher-risk assets such as commercial paper, meanwhile, saw assets rise to $961.7 billion, a $10.3 billion increase.