The crisis in the US banking industry has prompted investors to pour $756 billion into money market funds

Bank of America (BofA), a global financial powerhouse, reports that $550 billion has recently flooded money market funds.

Despite the ongoing financial crisis and the Federal Reserve’s aggressive rate rises, money market funds have received $756 billion in investments this year, according to a recent BofA investor note, as reported by Reuters.

One sort of mutual fund is called a money market fund, and its goal is to generate income by purchasing and holding high-quality, short-term debt instruments, such as those issued by the United States government. This year’s dramatic increase in interest rates has caused money market fund yields to soar to new heights.

The financial behemoth claims that investors are starting to pour money into money market funds at a rate that has yet to be seen since about three years ago when they transferred $917 billion into cash funds because of fear of the Covid-19 outbreak.

According to an investor letter from BofA, money market funds are receiving massive cash inflows at the cost of the stock market.

According to financial analytics company EPFR data, BofA reports that stock market-focused funds had outflows of $3.9 billion for the third consecutive week.

According to the investor note, Bank of America’s senior investment strategist Michael Hartnett predicted a significant market decline in the weeks ahead.

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