‼️Money market funds are NOT money on the sidelines:

US money market funds held by households hit a record $5.21 trillion.

This also accounts for a tiny amount of the US stock market cap at less than ~7%, way below the historical average levels.

Furthermore, most of these assets are money transferred from deposit accounts and will likely never flow into stocks.

80% of the money that has flowed into these funds is retail cash coming from deposit accounts, with only 20% being institutional.

This money belongs to people who have historically avoided stock market investing entirely, prioritizing safety over returns, meaning a drop in money market yields is more likely to send this cash back into deposit accounts than into equities.

Even if half of it were to go into stocks, the impact on equity markets would be minimal.

Cash on the sidelines is one of the biggest myths in markets.