MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
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MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
|
Thursday, March 19, 2020 The Fed Props Up Money Funds As the coronavirus pandemic and its effects continue to spread, the country's lender of last resort is trying to boost a certain type of mutual fund.
Barron's, Bloomberg, Reuters, and the Wall Street Journal all reported on the news. "The Money Market Mutual Fund Liquidity Facility is a reaction to large redemptions in prime MMFs last week," writes Credit Suisse analyst Craig Siegenthaler, who covers asset managers. "The Global Money Market Funds Outlook has been revised to negative from stable, owing to unprecedented market volatility and economic uncertainty amid the coronavirus pandemic," writes the team at Moody's. "Over the last few days, the US prime institutional money market fund segment has lost more than 10% of total portfolio assets. This sharp rise in daily outflow rates has reduced funds' liquidity levels and placed downward pressure on funds' NAVs." Through MMLF, the Boston Fed will lend money to banks to buy securities from prime money funds, to keep those funds liquid. The program is backed by $10 billion of credit protection from the Treasury Department. (By comparison, from 2008-2010 the Fed pumped $217 billion into money funds, all of which was paid back. Printed from: MFWire.com/story.asp?s=61036 Copyright 2020, InvestmentWires, Inc. All Rights Reserved |
