The "Pumpkin Carriage of US Treasuries" will depart on June 5th, with the total assets of the money market fund reaching 5.4 trillion, hitting a historical high!

U.S. Treasury Secretary Yellen said yesterday that the Treasury will run out of funds on June 5th, contrasting the embarrassment of the Treasury's depleted coffers, the size of the money market funds has hit a historic high!

Is the Money Market Fund Flooded with Cash?

On the other hand, institutions and investors who fear being swept up in the aftermath of the U.S. debt ceiling storm have poured their money into the money market.

According to data from the Investment Company Institute (ICI), as of Wednesday (5/24), the total assets of money market funds investing in "high-quality short-term debt" reached $5.4 trillion. Another data provider, EPFR, indicated that money market funds absorbed $146 billion in May.

As mentioned earlier, if the U.S. Congress fails to reach an agreement on raising the debt ceiling, there is a possibility of "delayed payments" for bonds maturing around June. Therefore, many institutions have redirected funds into the repurchase market to earn overnight interest. USDC issuer Circle is an example.

Why is everyone rushing to the money market fund: Is it a good idea for Circle to abandon U.S. bonds and turn to repurchase agreements (Repo)?

JPMorgan estimates that after the debt ceiling is lifted, the Treasury will issue around $750 billion in bonds within about four months. At that time, money market funds with large cash holdings can intervene, and they will still be the focus of the market.