The Federal Reserve and Institutional Money Market Funds in March 2020

Abstract

In this article, I discuss which Federal Reserve (Fed) policies implemented impacted Money Market Funds (MMFs) inflows or outflows the most. The timeframe is March 2020, with the exigence of the COVID-19 pandemic. This research is necessary because it helps the Federal Reserve know which policies can support the short-term money market. The Short-term money market is vital for the economy because it provides short-term funding for banks which are the foundation of the US economy. Although MMFs are only a portion of the short-term money market, any change implemented in one sector will affect all others because they’re closely intact. I used qualitative content analysis to find which policies prompt the most inflows/outflows. Through my research, I concluded that Federal Reserve Facilities to provide funding to various areas of the economy are what investors deem most worthy of investment.