With short-term rates climbing, investors are shifting $5.11 trillion into money market funds to capture risk-free yields, fundamentally altering the opportunity cost of holding equities.
Rising short-term rates increase the yield on SGOV's Treasury bill holdings, making it more attractive to investors.
U.S. households have accumulated a record $5.11 trillion in money market funds, marking 17 consecutive quarters of growth. As the Federal Reserve signals further rate hikes toward 4.75%, investors are increasingly prioritizing the competitive yields of cash-like assets over the volatility of the equity market.
Investors are seeking competitive, low-risk yields as the Federal Reserve raises interest rates, making cash-like assets more attractive compared to the potential drawdowns in the stock market.