On December 16, 2008, the Federal Reserve moved the U.S. economy to a zero interest rate policy (ZIRP) by reducing the target federal fund rate to a range of zero to 0.25%. Three weeks later, U.S. money market mutual funds achieved an all-time high level of assets – $3.92 trillion, according to the Investment Company Institute (ICI).
Since the start of the ZIRP era, which shows no signs of ending soon, U.S. money market fund assets have declined by $1.05 trillion through 4/28/10. If the current trend continues, another $800 billion will disappear from money market funds from now through the end of this year.
In 2007, according to the ICI, money market funds paid an all-time high $113.3 billion in dividends, representing an average yield of about 3.7%. Last year (2009), they paid out just $16.6 billion, an average yield of 0.5%.
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
- Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
- Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
Already have an account? Sign In
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
