Like Taylor Swift, assets in money-market funds keep setting records this year. But a key group of investors isn’t even leading the charge, said Deborah Cunningham, chief investment officer, global liquidity markets at Federated Hermes.
“Institutional flows will happen at the end of this year, and into 2024,” she said, should historical patterns in the half-century-old industry end up repeating. Cunningham heads the roughly $530 billion cash management effort at Federated Hermes, a unique group that is both women-led and longstanding, with its leadership climbing the ranks of the firm through the 1980s and ’90s.
Money-market funds started seeing more inflows in mid-2022 when the Fed first began lifting its rate from a 0%-0.25% range. They shot higher this March after the collapse of Silicon Valley Bank, while hitting a record $6 trillion of assets after July when the Fed bumped up its rate to a current 5.25%- 5.5% range.