Weighted average maturity at money market funds fell to 38 days in the week ended July 10 from 42 days a month earlier, showing managers turning more defensive as the Fed’s rate path remains unclear.
That shift reflects concern that rates could still rise even as softer inflation supports cuts or a pause, making longer-dated Treasury bills riskier to lock in now.
Treasury floating-rate note holdings rose $32 billion at end-June to a record $523 billion, while repo balances climbed $68 billion to $3.06 trillion as managers sought flexible, low-duration exposure.
Treasury bill holdings still totaled $3.3 trillion, but funds cut them by $96 billion; overnight repos have also become less attractive as Fed reserve-management purchases depressed repo yields.
The repositioning comes as money fund assets reached a record nearly $8 trillion in early July, with futures implying one Fed hike in 2026, most likely in December.