Page content
The Us Debt Crisis 2023 and Money Market Funds
We study the fiscal debt crisis in the US during early 2023 on Money Market Funds (MMFs). We report a spike in yields by approximately 150 basis points for MMFs investing in federal government securities. In addition, due to the debt crisis, investors started withdrawing money from treasury funds due to a "flight to safety." However, there is no statistically significant asset flow from the government and prime MMFs. Finally, we discuss the implications of our results.