Last week, money market funds recorded a HUGE $60 billion outflow. This was 2.2% of all money market assets! The week before it was a $30 billion outflow. Both of these are the two largest outflows since the collapse of Lehman. That week it was a $144 billion outflow.
The current outflow is seismic. It is not clear what is causing it, possibly a sudden shift by investors seeking higher yield. Whatever it is, it is likely not good. This size change in flows can easily be classified as a turn of the kaleidoscope which I discussed earlier this week. This means a serious shift, again, in trends. Just how and where, time will tell, but a $90 billion outflow is going to rattle something.
Reg 2a-7 takes effect May 5 and will allow redemption suspensions and force AWM < 60 days from 90.
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