Billions of dollars are flowing out of the traditional banking system as money market funds witness a wave of inflows.
According to fresh stats from the Federal Reserve Economic Data (FRED) system, $48.81 billion in deposits exited American bank accounts from August 10th through the 16th.
[adinserter block="1"]In the last year, a the total amount of deposits in American banks has dropped from $18.03 trillion to $17.29 trillion – a decline of $740 billion.
The deposit flight comes as money market funds record the largest level of inflows in six weeks as investors look for steady returns on their cash.
While remaining net sellers on US equity funds, data from Refinitiv Lipper shows investors just poured $32.29 billion worth of purchases in money market funds in one week, reports Reuters.
Healthcare, financials, metals & mining, and utilities sectors law losses of $747 million, $579 million, $556 million and $497 million, respectively.
The rush into money markets comes as an increasing number of analysts forecast a more drawn out, higher interest rate environment rather than a sharp pivot from central banks.
Economists at Goldman Sachs think the U.S. Federal Reserve may begin lowering its benchmark interest rate in the second quarter of next year.
The bank’s economists also predict that the Fed will skip rate hikes next month and in November.
“The cuts in our forecast are driven by this desire to normalize the funds rate from a restrictive level once inflation is closer to target.”
Follow us on X, Facebook and Telegram
Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any assets including cryptocurrencies, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Generated Image: Midjourney
