2 min readWhat a difference a year makes. Every January we publish a report analyzing top trends to monitor in the coming year. Last year, we noted the relative calm in short-term debt markets, a full-employment economy boosted by tax-cut legislation, and expectations that the Fed would continue its series of slow, steady and predictable rate hikes…
2 min readTrade wars. Stock market volatility. An economy on the verge of overheating. Rising uncertainty about the Fed’s next moves. Welcome to 2019. Whatever happened to that more placid era of zero interest rates, when the Fed signaled its first tentative rate hikes months in advance? When that beautiful, unbroken string of positive monthly job reports…
2 min readFor corporate cash investors managing portfolios during an economic expansion, “what goes up, must come down” is a good rule to live by. The current decade-long expansion in the U.S.—among the longest on record—has defied that maxim so far. But as it matures into old age, risks for investors are reemerging. Our November white paper,…
2 min readA growing number of institutional cash investors seeking higher returns are turning to direct investments in commercial paper. Why? In part because prime money market funds no longer deliver an optimum combination of liquidity, safety and yield as they did in the past. Among other things, the SEC reforms two years ago resulted in a…
2 min readCorporate cash managers by necessity are amongst the most conservative of investors. Before optimizing yield potential, they must often worry first about ensuring liquidity while reducing risk. That’s why in the aftermath of the 2008 credit crisis, corporations hunkered down almost exclusively in government-issued and government-backed debt. For a time, many stopped parking their cash…
2 min readEver since reforms inspired by the financial crisis required prime money market funds to float their net asset values, institutional cash investors have been searching for alternatives that will provide the same type of dollar-in, dollar-out liquidity, safety of principal and yield that the old prime funds offered. And now that the Fed’s interest-rate hikes…
2 min readOne of the great lessons we learned from the 2008 financial crisis was that the world is not as safe as we often think. That’s as true today as it was then, even after extensive industry and regulatory efforts aimed at the financial system. Corporate cash investors are confronting a financial landscape that’s even more…
2 min readIf you’re a cash investor waiting for bank deposit yields to catch up with the Fed’s interest rate hikes, don’t hold your breath. The so-called “deposit beta,” which measures how fast banks raise their rates as a percentage of the increase in the federal funds rate, has risen at a snail’s pace compared to previous…
1 min readIn recent years, privately held startups seeking faster growth have increasingly looked beyond their initial equity investments to venture debt financing. Venture debt tends to be less dilutive than equity, and it’s become more available over time: venture banks, specialty finance companies and an ever-expanding roster of non-bank debt funds now are lending across the…
2 min readInstitutional cash investors haven’t had much time to worry about offshore money market funds over the past several years as they’ve been too busy grappling with all the recent changes to US-based institutional funds. But new developments are making offshore funds more difficult to ignore, especially those involving the implementation of MMF reforms in Europe…