Cash-Loving Investors Dig in Even as US Rate Cuts Threaten Payouts
|
30 August 2024 A golden era for cash may be winding down as the Federal Reserve gets ready to cut interest rates. Many fans of the investment class are staying put anyway. Assets in U.S. money markets hit a record $6.24 trillion this month, data from the Investment Company Institute showed on Aug. 21, even as markets became increasingly confident that the Fed was gearing up to lower rates at its Sept. 17-18 meeting. Those reductions are expected to eventually pull yields in money markets down from above 5%, a rate unimaginable a few years ago. So far, however, there is little evidence that individual investors are abandoning cash to chase returns in stocks and bonds. Some $100 billion flowed into money markets in August, according to data analysis firm EPFR. “We don’t feel any need to move our money,” said Vance Arnold, a 71-year-old retired teacher and baseball coach from Fayetteville, Arkansas, who has about 80% of his seven-figure portfolio in money markets and other cash equivalents. Money-market yields went from near-zero to “4.5%, 4.7%, and now we’re over 5.2%. I can live with 4.5% again,” he said. To find out more details please visit : https://www.reuters.com/ |