Mid-Week Wrap: 10th January 2024
10 J A N U A R Y 2 0 2 4 • I S S U E 5
Market Mood
Last week witnessed an unprecedented influx of $123 billion into US money market funds, marking the highest-ever figure for the inaugural week of a year. In the preceding year, money market funds experienced a record-breaking $1.2 trillion in inflows. Notably, these inflows surpassed those directed towards equities, indicating that numerous investors potentially overlooked the equity rally. Additionally, an attractive risk-free arbitrage opportunity for banks is on the verge of conclusion, as the Federal Reserve has indicated its reluctance to renew the Bank Term Funding Program. This program, established during the US banking mini-crisis last year, enables banks to borrow from the Fed at interest rates presently lower than what the Fed pays for reserve deposits.