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Cash still king for US retail investors even with Fed rate cuts
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There is little evidence that individual investors are abandoning cash to chase returns in stocks and bonds even with impending rate cuts.
PHOTO: REUTERS
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A golden era for cash may be winding down as the US Federal Reserve gets ready to cut interest rates. But many fans of the investment class are staying put anyway.
Assets in US money markets hit a record US$6.24 trillion (S$8.15 trillion) in August, data from the Investment Company Institute shows, even as markets became increasingly confident that the Fed was gearing up to lower rates at its Sept 17 to 18 meeting. Those reductions are expected to eventually pull yields in money markets down from above 5 per cent, a rate unimaginable a few years ago.
