US money market fund assets hit a record $8.281 trillion as of May 28, fueled by a $66 billion weekly inflow, according to Crane Data LLC.
The bulk of the inflow came on a single Thursday during month-end portfolio rebalancing. Year-to-date inflows now total $172 billion. The seven-day average yield stands at 3.34%, offering a near-risk-free return that competes with bonds, equities, and crypto yield products.
The market currently prices in a roughly 60% probability of a 25-basis-point rate hike this year. That reversal from earlier expectations for multiple cuts reflects heightened inflation concerns and geopolitical tensions. Money market funds are the direct beneficiary.
DeFi protocols offering 2-4% on stablecoin deposits now look less appealing. Tokenized money market funds and Treasuries reached a record $15.35 billion in total value locked in May. That remains a fraction of the $8.28 trillion in traditional assets.