
Money market and liquidity Global Liquidity Survey reveals cash management trends
How are treasurers managing short-term investments while preparing for the future? Find out in the 2025 AFP Liquidity Survey, sponsored by Invesco Global Liquidity.
The Federal Reserve maintained short-term interest rates at 4.25% – 4.50% through the end of the second quarter after cutting rates by 100 basis points in 2024.1
Looking ahead, upcoming CPI, PCE, and GDP data will offer clearer insight into how the new administration's tariffs are affecting markets, businesses, and consumer behavior.
We expect the US debt ceiling issue to be resolved, with the Treasury likely to increase short-term debt issuance to replenish cash reserves.
The Federal Reserve maintained short-term interest rates at 4.25% –4.50% through the end of the second quarter after cutting rates by 100 basis points in 2024.1 The Federal Open Market Committee (FOMC) has shown a strong commitment to data-dependency, but recent economic data are starting to show slowing inflation with some pockets of weakness in growth. These economic factors, combined with growing political pressure, may test the committee’s resolve.
However, we believe it is too early for the impact of tariffs to show in the economic data, especially in inflation data. We believe this will cause the FOMC to be patient, but we recognize that it might react more strongly to weaker-than-forecasted employment and growth than shorter-term tariff-induced price increases and could respond with insurance cuts given the current modestly restrictive monetary policy. The market continues to price in rate cuts, with the first full 25 basis point cut priced for the September 17 meeting, and more than another full 25 basis point cut priced for the December 10 meeting.2
The debt ceiling negotiations continue, as concerns have become more evident at the US Treasury’s recent four-and eight-week bill auctions, where there is an approximately 30 basis point gap between those two maturities3, as estimates of the so-called “x-date” is now in early September. Our view is that there will be a successful resolution to the debt ceiling as both the House and the Senate have included debt ceiling increases in their versions of the One Big Beautiful Bill Act.
US money market fund assets have continued to grow, with approximately USD7.4 trillion in assets under management, as investors have added more than USD320 billion year-to-date.4 Many industry participants believe assets will remain high, even as the FOMC may lower interest rates in the second half of this year, due to still attractive yields that money market funds provide and safety, given the uncertain global political environment.
How are treasurers managing short-term investments while preparing for the future? Find out in the 2025 AFP Liquidity Survey, sponsored by Invesco Global Liquidity.
Laurie Brignac, Chief Investment Officer and Head of Invesco Global Liquidity, offers her short take on the latest Federal Open Market Committee meeting and what it may mean for liquidity investors looking ahead.
We highlight policy issues to watch in the second half in the US, UK, Europe, and Asia Pacific, including trade and tariffs.
NA4616676
This link takes you to a site not affiliated with Invesco. The site is for informational purposes only. Invesco does not guarantee nor take any responsibility for any of the content.