Record cash holdings and cautious market sentiment

  • Investors have stashed a record $6.48 trillion in U.S. money-market funds
  • Federal Reserve’s pushback on rate-cut expectations has led to increased cash holdings
  • Investors are cautious about inflation data and bond market performance
  • Consumer-price index release for January is seen as a key event
  • Investing in the front-end of the Treasury yield curve is recommended
  • Staying in cash can be tempting, but investors may miss out on stock market gains
  • A traditional 60:40 allocation to stocks and bonds is favored
  • S&P 500 reaches 5,000 for the first time ever

The Federal Reserve’s recent pushback on expectations for interest-rate cuts has led investors to stash a record $6.48 trillion in U.S. money-market funds. This comes as investors closely watch inflation data and remain cautious about the performance of the bond market. The release of the consumer-price index for January is seen as a key event. Investing in the front-end of the Treasury yield curve is recommended, while staying in cash may cause investors to miss out on potential stock market gains. A traditional 60:40 allocation to stocks and bonds is favored. The S&P 500 recently reached 5,000 for the first time ever.

Public Companies: Crane Data (), Federated Hermes (), DWS Group (), Janus Henderson Investors (), FactSet ()
Private Companies:
Key People: Jerome Powell (Fed Chairman), Deborah Cunningham (Chief Investment Officer, Global Liquidity Markets at Federated Hermes), George Catrambone (Head of Fixed Income at DWS Group), Adam Hetts (Global Head of Multiasset at Janus Henderson Investors)

Factuality Level: 7
Justification: The article provides information about the Federal Reserve’s pushback on expectations for interest-rate cuts and the impact on investors. It includes quotes from experts and data on money-market funds. However, there are some tangential details about stock market performance and investment strategies that are not directly related to the main topic.

Noise Level: 3
Justification: The article provides relevant information about investors’ response to the Federal Reserve’s pushback on interest-rate cuts and the increase in cash being invested in money-market funds. It also discusses the impact on bond and stock markets. However, there is some repetitive information and the article lacks in-depth analysis or actionable insights.

Financial Relevance: Yes
Financial Markets Impacted: Investors are closely watching inflation data and putting more cash into money-market funds.

Presence of Extreme Event: No
Nature of Extreme Event: No
Impact Rating of the Extreme Event: No
Justification: The article discusses the impact of the Federal Reserve’s pushback on expectations for interest-rate cuts on investors and the bond market. It also mentions the record amount of money being invested in money-market funds. However, there is no mention of any extreme events.

Reported publicly: www.marketwatch.com