Even with interest rate cuts on the horizon, capital is still pouring into money market funds.

The latest data shows that the total assets under management of US money market funds have surpassed $8 trillion, setting a new record. Just this week alone, $105 billion flowed in, with a cumulative inflow of over $848 billion so far this year. This growth rate is indeed quite astonishing.

Why is money still flooding in? Simply put, the returns are attractive enough. Currently, the seven-day annualized yield of these funds can reach around 3.80% (according to the Crane 100 Index data), which is significantly higher than bank deposit rates. The key point is that banks are always slower to adjust their rates. After the two Fed rate cuts in September and October, the yield advantage of money market funds became even more pronounced.

In terms of capital sources, most of it comes from institutions and corporations optimizing their cash management—they prefer to let professional teams manage their idle funds for returns. Retail investors account for about 15%-20% of allocations, which is actually quite normal and doesn’t indicate any signs of excessive allocation.

Looking ahead, although the likelihood of another rate cut in December is increasing, as long as yields remain above 2%, the attractiveness to capital won’t diminish. Many industry institutions predict that the scale of money market funds will continue to grow next year, and large-scale redemptions are unlikely to occur in the short term.