Key Facts

• Money-market funds are shifting their investments towards ultra short-term holdings in response to growing uncertainty over the Federal Reserve's policy path and the near-term outlook for interest rates.
• This strategic adjustment involves moving away from assets with even modest interest-rate risk, indicating a preference for more liquid and less volatile investments.
• The overall effect of this shift is that money-market funds are keeping cash closer, positioning themselves for potential changes in the market by maintaining greater liquidity and minimizing exposure to interest-rate fluctuations.