Record $8.44 Trillion in Money Markets Earns 3.5% as Inflation Wipes Out Real Return
Updated
Updated · Yahoo Finance · Aug 24
Record $8.44 Trillion in Money Markets Earns 3.5% as Inflation Wipes Out Real Return
1 articles · Updated · Yahoo Finance · Aug 24
Summary
$8.44 trillion is now parked in U.S. money market funds, where average yields near 3.5% match headline inflation and leave investors with essentially zero real purchasing-power gain.
The squeeze reflects the rate backdrop: the Crane 100 Money Fund Index averages about 3.50%, while the Fed funds upper bound has held at 3.75% since December 2025 and CPI is running around 3.5% year over year.
Even nearby cash alternatives offer little relief, with 13-week Treasury bills yielding about 3.8% and only marginally improving inflation-adjusted returns.
The report says investors seeking to preserve cash-like behavior without giving up all real yield are looking at short-duration alternatives such as AAA CLO funds, including JAAA, which yields roughly 140 basis points more than money funds.