US Rates: Cash on the sidelines or just cash?

• Money fund balances have continued to grow despite Fed rate cuts due to attractive yields relative to other liquidity products
• Most of the cash in money funds is liquidity money, making them a compelling place to park cash
• Money funds tend to see inflows heading into an easing cycle and persist even as the yield curve begins to disinvert or steepen, with outflows only occurring once the curve stabilizes.

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