Investors kept pulling
billions from U.S. money-market mutual funds in the week ending Tuesday, withdrawing $41.6 billion, or 1.6 percent of total assets, as concern grew over lawmakers’ inability to strike a budget deal that would avert a default on Treasury securities, an issue that was finally resolved Wednesday night.
The exodus was punctuated by the withdrawal of $21.6 billion on Oct. 11, according to research firm Crane Data in Westborough, Mass.
Investors pulled $15.7 billion in the preceding week. While the spike appeared connected to the approaching debt ceiling, it was exacerbated by companies moving cash to make payroll and meet a quarterly tax-payment deadline, said Peter Crane, president of Crane Data. “The outflows are still quite manageable,” Crane said. “They’d be worrisome if they continued.”
Several of the largest money-fund providers, including Fidelity and JPMorgan Chase, have said they have sold Treasurys maturing in the next few weeks and are building extra liquidity to meet potential client withdrawals.