Money-Market Inflows and the Inevitable Banking Abyss

In a world that seems stable but is actually full of deceptions, money-market funds have briefly seen more money coming in, about $24.9 billion, mocking last week’s bank deposit outflows. In this twisted financial game, both regular people and big investors are diving back in, adding $8.6 billion and $16.3 billion, not caring about the hidden risks. But while bank deposits and money market fund assets are moving in opposite directions, it’s hard not to see how pointless this all is. The Federal Reserve’s balance sheet is getting smaller fast, losing $25 billion and hitting its lowest point since May 2021. They’re still selling off assets, and it’s the most they’ve sold in more than a year. At the same time, the emergency bank funding has hit a new record of over $109 billion, quietly showing how grim the crisis really is. Regional banks are stuck facing a $109 billion hole in their accounts, their money draining away, and they only have a few months to fix it. In this fake show of financial safety, the money flowing back into money-market funds is not a sign of strength. Instead, it’s a dark reminder that in this dance of money and doubt, every step forward is actually a step toward the edge of economic ruin.