Complete property in cash market funds have hit a brand new document excessive, in response to the newest information from the Funding Firm Institute. The funds, which nonetheless have yields above 5%, noticed complete property hit $6.06 trillion for the week ended Feb. 28, the agency stated . “Cash fund property proceed drawing money from lower-yielding financial institution deposits, and institutional cash funds have been rising sooner as a consequence of considerations over uninsured deposits and New York Neighborhood Bancorp ,” stated Peter Crane, founding father of Crane Knowledge, a agency that tracks cash markets. “Belongings ought to proceed larger although they need to pause for the upcoming March 15 and April 15 tax dates,” he added. New York Neighborhood Bancorp’s troubles embody January’s shock fourth-quarter loss and dividend minimize. Final week, the financial institution reported ” materials weaknesses ” in the way in which it reviewed its portfolio of loans as a consequence of poor oversight. On Friday, Fitch Scores downgraded NYCB to junk. Moody’s had downgraded the financial institution to junk final month and on Friday additional lowered all long-term and a few short-term scores and assessments. Whereas some on Wall Road suppose a number of the money in cash markets will transfer into shares, Crane has stated there isn’t any correlation between the 2. As a substitute, cash markets are competing with financial institution deposits, he believes. In truth, shares hit new highs final week, with the S & P 500 closing above 5,100 for the primary time on Friday. .SPX YTD mountain S & P 500 12 months to this point JPMorgan additionally thinks nearly all of the property in cash market funds are money financial savings for retail traders or core liquidity for firms. The financial institution believes that solely about $500 billion is inclined to “flight danger.” “No matter what different markets are doing, that cash is right here to remain,” analyst Teresa Ho informed CNBC final month. In the meantime, Crane stated that whereas yields will come down this 12 months, they’ll nonetheless be fairly engaging. The annualized seven-day yield on the Crane 100 record of the 100 largest taxable cash funds is at present 5.14%. That is down from the 5.20% excessive on the finish of final 12 months however up from 0.17% on Dec. 31, 2021, in response to Crane Knowledge. Crane anticipates yields will not go beneath 4% by the tip of 2024.