Money fund cash flow has turned negative for short-term Treasuries. Bid-ask spreads widened and bill yields rose. The market has not seen this pattern for six years. Flow is the signal.
💡 Frequently Asked Questions (FAQ)
- Q: Why did money fund flow turn negative for short-term Treasuries?
- A: Money funds have stopped buying short-term Treasuries, flipping cash flow negative and removing a key source of demand from the market.
- Q: What does widening bid-ask spreads mean for short-dated debt?
- A: Wider spreads signal lower liquidity, higher transaction costs, and reduced market depth as buyers step back.
- Q: How rare is this liquidity pattern?
- A: The combination of negative money fund flow, wider spreads and rising bill yields has not been seen for six years.