Money Markets
Financial markets for short-term borrowing and lending, typically under one year, involving instruments like repos, commercial paper, and CDs.
What is Money Markets?
U.S. money markets handle $20 trillion in assets in 2025, with daily trading volumes of $5 trillion in repos and $2 trillion in T-bills. Participants include banks, corporations, and governments, with rates like SOFR at 4.83% and commercial paper at 5.0% for 3-months. Money market funds (MMFs) hold $6.5 trillion, investing in assets yielding 4.7% average.
They provide liquidity; during 2020, MMFs faced $150 billion outflows, prompting Fed facilities like MMLF to lend $50 billion. Instruments include CDs with $2.5 trillion outstanding and Eurodollars at $14 trillion. Regulations post-2008 require prime MMFs to float NAV, reducing risk.
In 2025, money markets reflect Fed policy, with yields compressing as rates fall, boosting corporate short-term funding at lower costs.
Related Terms
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IMF Stablecoin Guidance
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BTC ETF
Exchange-traded funds that provide direct exposure to Bitcoin's spot price, approved by the SEC in January 2024.
Bitcoin Treasury
A corporate financial strategy involving the allocation of company reserves into Bitcoin as a primary treasury asset to preserve value and pursue long-term appreciation.
Block and Block Height
A block is a collection of transactions recorded on a blockchain, and block height is the sequential number of a block in the chain, starting from the genesis block.