The Investment Company Institute's latest weekly "Money Market Fund Assets" report shows money fund assets rising $44.8 billion to a record high $7.979 trillion. Assets rose $6.1 billion the previous week and increased $900 million the week before this. MMF assets are up by $720 billion, or 9.9%, over the past 52 weeks (through 9/2/26), with Institutional MMFs up $571 billion, or 13.3% and Retail MMFs up $149 billion, or 5.0%. Year-to-date in 2026, MMF assets are up by $246 billion, or 3.2%, with Institutional MMFs up $210 billion, or 4.5% and Retail MMFs up $36 billion, or 1.2%.
ICI's weekly release says, "Total money market fund assets increased by $44.75 billion to $7.98 trillion for the week ended Wednesday, September 2, the Investment Company Institute reported.... Among taxable money market funds, government funds increased by $38.80 billion and prime funds increased by $4.92 billion. Tax-exempt money market funds increased by $1.03 billion. ICI's stats show Institutional MMFs increasing $33.7 billion and Retail MMFs increasing $11.1 billion in the latest week. Total Government MMF assets, including Treasury funds, were $6.586 trillion (82.5% of all money funds), while Total Prime MMFs were $1.242 trillion (15.6%). Tax Exempt MMFs totaled $150.9 billion (1.9%).
It explains, "Assets of retail money market funds increased by $11.10 billion to $3.11 trillion. Among retail funds, government money market fund assets increased by $7.76 billion to $1.98 trillion, prime money market fund assets increased by $2.78 billion to $993.16 billion, and tax-exempt fund assets increased by $565 million to $137.92 billion." Retail assets account for 39.0% of the total, and Government Retail assets make up 63.7% of all Retail MMFs.
They add, "Assets of institutional money market funds increased by $33.66 billion to $4.87 trillion. Among institutional funds, government money market fund assets increased by $31.04 billion to $4.60 trillion, prime money market fund assets increased by $2.15 billion to $249.01 billion,and tax-exempt fund assets increased by $469 million to $13.00 billion." Institutional assets accounted for 61.0% of all MMF assets, with Government Institutional assets making up 94.6% of all institutional MMF totals.
According to Crane Data's separate Money Fund Intelligence Daily series, money fund assets have increased by $41.1 billion to $8.383 trillion month-to-date in September (as of 9/2), assets reached an all-time high of $8.404 trillion on July 6. Assets increased $52.8 billion in August, decreased $61.4 billion in July, increased $58.6 billion in June, $208.6 billion in May, decreased by $108.8 billion in April, $49.3 billion in March, increased $99.5 billion in February, $32.9 billion in January, $126.3 billion in December, $132.8 billion in November, $142.1 billion in October and $105.2 billion last September. Note that `ICI's asset totals don't include a number of funds tracked by the SEC and Crane Data, so they're almost $400 billion lower than Crane's asset series.
- In other news, the Board of Governors of the Federal Reserve posted a "FEDS Notes"
- paper titled, "Repo Markets and the Fed's Balance Sheet: Implications for Monetary Policy Implementation." It explains, "As the Federal Reserve (Fed) navigates periods of balance sheet expansion and reduction, it has become increasingly important to understand how changes in the size and composition of Fed assets affect short-term funding markets. The overnight Treasury repo market is central to this relationship since it is a transmission channel through which balance sheet policy can affect money market conditions and, ultimately, the Fed's policy rate, the effective federal funds rate (EFFR). In addition, it serves as a vital funding source for Treasury market participants and provides a reference rate for trillions of dollars of financial contracts, so also acts as a key transmission channel for monetary policy to broader financial market conditions."
The post tells us, "In its December 2025 meeting, the FOMC determined that reserves had declined to ample levels and that it would purchase short-term Treasury securities to maintain an ample supply of reserves on an ongoing basis. As Anbil et al. (2024) outline, the size of the central bank's balance sheet that is consistent with an 'ample reserves' framework can be thought of as facing two constraints. The first arises from banks' reserve demand, which directly affects lending and borrowing behavior by banks in the federal funds market and, therefore, EFFR. The second, less studied constraint, arises from demand for liquidity by non-banks (i.e., dealers and levered investors) that are primarily active in repo markets. This note focuses on the second constraint and examines the mechanism through which Fed balance sheet policy influences repo market dynamics and why these dynamics matter for monetary policy implementation."
It continues, "The effect of the Fed's balance sheet on short-term interest rates works through two connected steps: First, when the Fed reduces the size of its balance sheet, overall liquidity declines while the private sector must hold more Treasury securities. This increases dealer financing needs alongside a reduction in the supply of funds available to lend in the repo market, putting upward pressure on repo rates. Second, these repo pressures can spill over to the federal funds market, potentially affecting EFFR even when bank reserves remain above banks' minimum level of demand. We provide empirical evidence for this mechanism and discuss key factors that affect the relationship between the Fed's balance sheet and repo market conditions, including the level of the policy rate, Treasury bill supply, dealer regulation, and Fed standing repo operations."
The Fed states, "On the demand side, both primary dealers and hedge funds borrow in repo to finance purchases of longer-dated, coupon-bearing Treasury securities. Therefore, there is a direct link between demand for repo borrowing and the quantity of Treasury coupon securities held by the private sector. If that quantity increases, such as on the days when Treasury coupon securities are issued, demand for repo borrowing also increases, putting upward pressure on repo rates."
The Fed piece says, "On the supply side, MMFs' available cash to lend is determined by their assets under management (AUM). Thus, an increase in AUM leads to an increase in repo lending supply, which puts downward pressure on repo rates. Additionally, MMFs invest a significant portion of their portfolios in Treasury bills, which are close substitutes for their lending in repo markets. Therefore, if Treasury bill supply held by the private sector increases, MMFs have less cash available to lend in repo markets, putting upward pressure on repo rates."
Finally, the paper adds, "The Federal Reserve's balance sheet is tightly linked to repo markets, as overall Fed liquidity supply affects borrowing demand by dealers and hedge funds and available funds to lend by MMFs. FHLB arbitrage between the repo and federal funds markets can lead to spillovers of repo market pressures to the federal funds market, directly affecting the Fed's policy rate. This mechanism makes repo market dynamics an important source of information about overall liquidity conditions in the financial system. The September 2019 episode demonstrated how quickly pressures in repo markets can build and affect the federal funds market when liquidity is scarce. Monitoring repo market conditions therefore complements other indicators of reserve ampleness in assessing the effect of the Fed's balance sheet policy on money markets."
