​ Reserve Releases "​Cash Management Opportunities Amid Rate Changes". The Reserve yesterday released a brief publication that discusses the advantages money market funds have over direct money market securities during periods of falling interest rates. "​Federal Reserve policy has a significant effect on investment alternatives used for cash management. Historically, money funds have benefited from a decrease in the federal funds rate: more interest-​rate-​sensitive money is moved to funds from shorter duration securities such as bank deposits, repurchase agreements (​repos), commercial paper and auction-​rate securities.... In addition to being the model cash diversification tool, the "​lag" in money market fund yields ... [​because of their weighted average maturity (​WAM)] is an advantage in falling rate scenarios."

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