Money Fund Growth Slows in Latest Week, But Assets Still Set Record. Money market mutual fund assets increased by $4.39 billion in the week ended Dec. 12 to a record $3.122 trillion. Retail MMFs increased by $1.53 billion to $1.142 trillion and institutional MMFs increased by $2.87 billion to $1.981 trillion. Most of the asset gains occurred in tax-free money funds. This week's asset slowdown follows a 5-week tear where money fund totals grew by $176.1 billion. If tradition holds, funds should soon begin seeing year-end Holiday- and window-dressing related outflows, but this normally is followed by a flood of bonus and seasonal inflows in January. Year-to-date, money fund assets have grown by an astounding $740.7 billion, or 31.1%. If asset increases hold, they'll break the 1-year inflow record, $440 billion (23.8%) set in 2001, by over $300 billion. Yields should begin declining gradually in the coming week as funds begin digesting the Federal Reserve's latest rate cut in its Fed funds target rate, from 4.5% to 4.25%.
