$8.4 Trillion Sits in Money Markets, Earning Just Enough to Match Inflation

Yahoo Finance reported that money-market funds now hold a record $8.4 trillion, with yields around 3.5% — a level that roughly matches the current pace of inflation. That means investors holding cash in these funds are earning a real return of zero once inflation is accounted for. The scale of the figure matters because it shows how much capital remains on the sidelines rather than deployed into stocks, bonds or other assets, even as equity indexes have pushed higher this year. Separately, two contrarian ETF strategies were reported to be buying assets that Wall Street has been avoiding, a sign some investors see opportunity in areas the broader market has shunned. Whether this cash moves into riskier assets, or stays parked as a hedge, will depend largely on where inflation and interest rates head next.