(Bloomberg) -- Money-market fund assets climbed to a fresh record as interest rates north of 5% lure cash from banks and other short-term investments.
About $29 billion poured into US money-market funds in the week through Aug. 2, according to data from the Investment Company Institute. Total assets reached $5.52 trillion, versus $5.49 trillion the previous week.
Investors have piled into the money funds ever since the Federal Reserve began one of the most aggressive tightening cycles in decades last year to quell runaway inflation. Last week officials raised their main policy rate to between 5.25% and 5.5%, the highest in 22 years. Money funds have been quicker to pass on the benefits to investors than banks.
In a breakdown for the week to Aug. 2, government funds, which invest primarily in securities like Treasury bills, repurchase agreements and agency debt saw assets rise to $4.54 trillion, a $22.7 billion increase. Prime funds, which tend to invest in higher-risk assets such as commercial paper, saw assets jump to $857 billion, a $3.52 billion increase.
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