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%.