COMMENTARY: What's really driving flows into the $13.5 trillion money market pool?

Money market fund assets have hit a record $13.5 trillion in the first quarter, continuing a trend that began more than four years ago despite expectations of outflows during rate cuts. Reuters reports that U.S. holdings have risen roughly 58% to 65% since December 2022, helped by funds investing in short-term, high-quality debt such as Treasury bills. While the 2022 rate-hiking cycle attracted retail investors chasing higher yields, inflows persisted after 2024 as yields declined more slowly under “laddered” portfolio structures. Since mid-2023, institutions have also used money market funds as a defensive, liquidity-focused allocation, with corporate cash—including AI-related fundraising since early 2025—adding to the mix.