On this Talking Heads podcast, Investment Specialist Thibault Malin argues that even in a scenario where interest rates will be cut, as is the consensus expectation for euro rates this year, a variable rate approach still makes sense when running money market funds. He expects money market rates to remain attractive relative to other fixed income assets.
As Thibault explains to Chief Market Strategist Daniel Morris, apart from some seasonal redemptions, he does not expect any significant shift out of money market funds into other assets. With rates expected to stay relatively high, “money market funds will remain a preferred allocation for many investors” who experienced negative rates for a period prior to 2022.
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