Money market funds stockpile cash on US default fears

Natalie Kenway
clock

Money market funds in the US are building up liquidity as fears of a downgrade or default on the nation's debt intensify.

Although the funds still hold US Treasuries, they are stockpiling cash which is distorting the short-term market for government debt and raising borrowing costs for financial institutions, reports the FT. Barclays Capital said cash has been increased from 48% at the end of March to 68% of assets, to meet redemptions. Fidelity's head of money market business, Robert Brown, told the FT the group has built up liquidity with a "meaningful" amount of maturities. Decisions on where to invest cash have also been delayed while money market funds are also avoiding one-month Treasury notes w...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Investment

What advisers need to know as SpaceX fuels space investing interest

What advisers need to know as SpaceX fuels space investing interest

WisdomTree’s Mobeen Tahir unpacks the space economy theme

Sophia Panayi
clock 14 August 2026 • 1 min read
How markets have developed in 2026 so far

How markets have developed in 2026 so far

'Active allocation does not mean constant trading or short-term market calls'

James Flintoft
clock 12 August 2026 • 3 min read
How sustainable funds have beaten the index this year

How sustainable funds have beaten the index this year

'ESG funds benefit from access to some of the livelier parts of the market'

Ian Aylward
clock 10 August 2026 • 3 min read