What It Measures
Retail Money Market Funds measures the assets held in money market funds marketed to individual investors (as opposed to institutional MMFs). The data is:
- Collected weekly by the Investment Company Institute (ICI)
- Published as part of the Fed's H.6 Money Stock release
- A component of M2 money supply
Retail MMFs typically have lower minimum investments and are held through brokerage accounts, bank platforms, and direct fund purchases.
Why It Matters
Consumer Cash Proxy: Shows how much cash individual investors are holding in safe, liquid investments.M2 Component: Retail MMFs are included in the M2 money supply measure.Sentiment Indicator: Rising retail MMF assets may indicate cautious consumer sentiment.Rate Sensitivity: Retail investors are highly responsive to MMF yield changes vs bank savings rates.
How to Interpret
Weekly Changes: Focus on 4-week moving average to smooth weekly volatility.Year-over-Year: Compare to prior year levels to gauge trend in retail cash holdings.vs Institutional: Retail MMFs are about 1/3 of total; institutional behavior often differs.Context: Consider alongside stock market performance and savings rates.
Key Levels to Watch
| Level | Interpretation |
|---|---|
| Above $2.5 trillion | Very high retail cash holdings |
| $2.0-2.5 trillion | Elevated retail MMF assets |
| $1.5-2.0 trillion | Moderate retail cash levels |
| Below $1.5 trillion | Lower retail cash preference |
Historical Context
Retail MMF assets have grown steadily from under $1 trillion pre-2008 to over $2 trillion by 2024-2025. The 2022-2024 rate hiking cycle drove significant inflows as MMF yields became attractive relative to near-zero bank savings rates.
Limitations
- The data has some limitations:
- Excludes IRA and Keogh balances at MMFs (reported quarterly)
- Weekly data can be volatile due to timing of large fund flows
- Does not capture retail cash held in institutional MMF share classes