29 September 2023
US money market funds saw a $6.3BN inflow this week, nearing record highs after a previous outflow. Retail funds increased by $7.8BN, but institutional funds declined by $1.5BN. The Fed’s balance sheet shrank by $22BN, its smallest since June 2021. The emergency funding facility use remains at a high of $108BN. Concerns grow as banks might face a $108BN deficit soon, possibly leading to prolonged use of the “emergency” facility in an election year.