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Billions of dollars are flowing out of the traditional banking system as money market funds witness a wave of inflows.<\/p>\n
According to fresh stats<\/a> from the Federal Reserve Economic Data (FRED) system, $48.81 billion in deposits exited American bank accounts from August 10th through the 16th.<\/p>\n In the last year, a the total amount of deposits in American banks has dropped from $18.03 trillion to $17.29 trillion \u2013 a decline of $740 billion.<\/p>\n 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.<\/p>\n 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<\/a> Reuters.<\/p>\n Healthcare, financials, metals & mining, and utilities sectors law losses of $747 million, $579 million, $556 million and $497 million, respectively.<\/p>\n 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.<\/p>\n Economists at Goldman Sachs think<\/a> the U.S. Federal Reserve may begin lowering its benchmark interest rate in the second quarter of next year.<\/p>\n The bank\u2019s economists also predict that the Fed will skip rate hikes next month and in November.<\/p>\n \u201cThe cuts in our forecast are driven by this desire to normalize the funds rate from a restrictive level once inflation is closer to target.\u201d<\/em><\/p>\n Don’t Miss a Beat \u2013 Subscribe<\/a> to get email alerts delivered directly to your inbox <\/span><\/em>
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