💡 Frequently Asked Questions (FAQ)
- Q: Why do slowing money market fund flows push US Treasury yields up?
- A: Money market funds are major buyers of short-term Treasuries. When fund inflows slow, buying pressure eases, reducing demand and forcing yields higher to attract investors.
- Q: What is the link between fund cash flow and T-bill demand?
- A: Fund cash flow directly funds purchases of T-bills for liquidity. A slowdown in flow means less fresh cash to absorb new supply, tightening the market.
- Q: Does a yield spike after flow slowdown signal broader market stress?
- A: Yes, it can signal reduced liquidity appetite and rebalancing risk, especially if the slowdown reflects investor caution or regulatory constraints.