U.S. money-market funds received $158 billion in new cash during the first three quarters of 2026, according to TD Securities figures reported by Reuters on October 6. That was a much slower pace than the $823 billion recorded for all of 2025 or $840 billion in 2024—but funds were still adding Treasury bills, not dumping them. Slower buying, alongside expected heavy bill supply and rate-hike expectations, coincided with Treasury bills offering a wider yield premium over overnight index swaps (OIS).
What changed in money-fund flows and Treasury-bill holdings?
The key distinction is between the amount of cash entering funds and the assets they already hold. Inflows measure new net money over a period; assets and bill holdings are accumulated stocks. A slowdown in inflows can reduce how much funds add to bills without causing their existing holdings to fall.
| Measure | Reported figure | Period and attribution |
|---|---|---|
| Money-market-fund inflows | $158 billion | First three quarters of 2026; TD Securities figures reported by Reuters on October 6, 2026. |
| Money-market-fund inflows | $823 billion; $840 billion | Full-year 2025 and calendar 2024, respectively; TD Securities figures reported by Reuters. These are 12-month totals, unlike the nine-month 2026 figure. |
| Funds’ Treasury-bill holdings | Up about 4% | From year-end 2025 through the end of August 2026; Investment Company Institute data reported by Reuters. |
| Funds’ Treasury-bill holdings | Up 18% | During all of 2025; Investment Company Institute data reported by Reuters. |
The periods are not directly comparable: the 2026 inflow figure covers nine months, while the historical figures cover full years. The comparison points to a slower pace, not a like-for-like annual result. The holdings data likewise show slower accumulation, not net selling: money-market funds remained net buyers of Treasury bills.
Why can slower inflows affect Treasury-bill yields?
Less new cash means less incremental buying capacity
Money-market funds invest in short-term instruments, including Treasury bills and repurchase agreements (repo). When less new cash arrives, funds have less incremental money to allocate. If bill supply is rising at the same time, issuers may need to offer a higher yield to attract buyers at the margin. That can happen even while funds continue purchasing bills.
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The bill/OIS spread shows bills’ relative compensation
OIS rates reflect the market’s implied path for short-term policy rates. A wider Treasury-bill/OIS spread means bills are offering more yield relative to that benchmark at the time; it does not, by itself, identify why the spread widened or measure a single kind of risk.
Reuters reported on October 6, 2026, that the three-month bill/OIS spread was nearly 10 basis points on Monday, after reaching its widest level since September 2024 the prior week. The six-month spread was 11.3 basis points Monday, following a rise to 12.5 basis points, its highest since April 2025. These are observations reported at that time, not live market quotes.
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What else was pushing on bill yields?
Slower money-fund buying was one part of a broader supply-and-demand picture, not a complete explanation for the yield move.
- Expected bill supply: Analysts cited expectations of substantial fourth-quarter issuance. Barclays estimated issuance at roughly $225 billion in October and $160 billion in November; these were estimates, not final issuance totals.
- Rate-hike expectations: Anticipated increases in policy rates were another factor cited by market participants.
- Investor preferences: Reuters reported that a strong equity market may have reduced the incentive for some investors to shift cash into money-market funds.
As Barclays U.S. rates strategist Sam Earl put it in the Reuters report: “If money funds are not getting those inflows, then they have to think about where they want to put their money.”
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Does slower fund growth mean money-market funds are shrinking?
No. Fund assets can remain large—or grow—while the pace of new inflows slows. The Federal Reserve Board’s May 2026 Financial Stability Report put total money-market-fund assets at $7.9 trillion in January 2026, up from $7.2 trillion a year earlier. Government funds accounted for most of the increase. The report said the growth likely reflected money-market-fund yields remaining more attractive than most bank deposit rates.
The Federal Reserve’s Financial Accounts provide a different measure: economy-wide net purchases of Treasury bills were $929.0 billion in 2026 Q1 and $116.1 billion in Q2 in table F3.2.t. Those totals cover the broader domestic financial accounts; they are not figures for money-market funds alone and should not be used as a substitute for the fund holdings data.
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Could slower bill accumulation put pressure on repo markets?
How the connection works
Bills and repo compete for some of the same money-market-fund cash. In an August 26, 2026, research note, Federal Reserve Board staff described Treasury bills as close substitutes for repo lending and explained that an increase in privately held bill supply can leave funds with less cash to lend in repo. If that happens, repo rates may face upward pressure. This is a conditional market mechanism, not evidence that the reported slowdown in inflows had already caused repo disruption.
What conditions showed in 2026
Reuters reported that repo markets had remained orderly. The Federal Reserve’s July 2026 Monetary Policy Report described short-term money-market conditions as stable, although somewhat softer since the beginning of the year, and said money-market funds maintained near-record assets.
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The same report said the Federal Reserve had purchased nearly $250 billion in Treasury bills since early January 2026: about $160 billion through reserve-management purchases and $90 billion through reinvestments of principal payments on agency mortgage-backed securities. Those purchases and the Fed’s broader assessment provide context for market conditions; they do not rule out an effect from changing marginal demand in private bill markets.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Could money-fund inflows pick up later in the year?
Reuters noted that inflows often accelerate in the fourth quarter as investors prepare for year-end liquidity needs, taxes, and portfolio rebalancing. That historical seasonality could change the pace of fund buying, but it does not guarantee a rebound in 2026. For now, the useful distinction is between a possible slowdown in incremental demand and an actual reduction in fund bill holdings: the reported holdings were still rising through August.
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