America’s Comforting Cash

It’s more than a slight understatement to say that tariffs have added to market uncertainty and sparked talk about the pace of economic activity. In times like these, we’d normally see people trying to “buy the dip,” but investors and corporations are holding cash instead.

This isn’t a new behavior, however. The Money Market Funds (MMF) asset boom started long before tariffs made headlines.

Is This All Because Of Tariffs?

Although many news outlets have focused on the recent growth of MMFs, the real story is a little less anxiety-provoking. It’s true that Money Market assets have grown—from $4.4 trillion to over $7 trillion as of April 2, according to the Investment Company Institute. But (as we see above) the truth is…

This growth has a few potential drivers:

• Perceived Safety—Investors tend to move into these funds during uncertain times, such as the 2008 financial crisis, the early days of the pandemic, and after Silicon Valley Bank’s issues in 2023.
• Role in a Portfolio—Cash-equivalent can play a role in any portfolio, so it’s no surprise that MMF assets continue to increase as Americans’ net worth continues to increase.

Stay Grounded

While headlines can often stir emotions, it’s important to view current events within their historical context. As we’ve seen, assets flowing into Money Market Funds seem to represent a long-term trend rather than a reaction to recent developments.

As always, we’re here to help you remember that the most successful investors remain watchful, yet emotionally disciplined during times of uncertainty.