In a historic week for the nation and the financial markets, money market funds saw outflows across the board. As Congress was busy ironing out a resolution to the debt-ceiling crisis before the Aug. 2 deadline, investors withdrew $1.23 billion from tax-exempt money funds in the week ended Aug. 1, according to the Money Fund Report, a service of iMoneyNet.com.
The 477 reporting tax-exempt funds settled with $299.95 billion this week as outflows tapered off to a little more than half of the $2.09 billion that fled last week when the funds ended with $301.18 billion in total net assets.
The average, seven-day simple yield for the tax-exempt funds remained at 0.01% for the fifth week straight, while the average maturity was unchanged at 29 days.
A record $101.98 billion was withdrawn from the 1,131 taxable funds, the biggest one-week decline since March 16, 2010, which saw $70.70 billion of outflows. Total net assets dropped to $2.228 trillion for the week ended Aug. 2, after a week when taxable funds lost $16.20 billion and ended with $2.33 trillion. The average, seven-day simple yield for the taxable funds reporting this week rose one basis point to 0.02%, while the average maturity decreased one day to 38 days.
Overall, the combined assets of the 1,608 money funds in the report plunged $103.21 billion for the week ended Aug. 2 in what also marked the largest one-week decline in total fund assets since March 16, 2010, when the industry saw outflows of $75.63 billion.
The funds finished with $2.527 trillion on the same day that Congress approved raising the debt ceiling amid concerns about the country possibly defaulting on its debt and having its triple-A rating on long-term government debt downgraded.
Last week, the funds settled with total net assets of $2.630 trillion after losing $18.29 billion.