When the Federal Reserve first addressed soaring inflation more than two years ago, treasurers and public entity cash managers had multiple options to take advantage of the increased interest rates, including mutual funds, deposit products, Treasury bills and investment pools. Participants in the MMDT Cash Portfolio benefited from the development as its managers invested in a variety of money market instruments likely to benefit from the rising rates by extending the portfolio’s weighted average maturity (WAM). This allowed the portfolio to be invested in the long end of the liquidity yield curve (securities and paper maturing within a year) to capture higher yields. The Fed continued its easing cycle in December with another quarter-percentage-point rate cut, taking the federal funds target range to 4.25-4.50%. Inflation has been sticky, however, and officials now project only two additional 25 basis-point cuts in 2025 as opposed to four. That scenario likely would keep participants in the MMDT Pools in an enviable place. We expect attractive yields to remain in the liquidity-markets if the tempo slows, and a gradual decline could lead to price appreciation in short-term bonds. Past performance is not a guarantee of future results, but treasurers and public entity cash managers might be in a sweet spot. In addition to seeking attractive returns, the MMDT Pools provide the benefits of diversification, active portfolio management by investment professionals and a competitive fee structure. We think this positions them well to address the public sector’s liquidity and income needs, no matter the rate environment. Please contact your MMDT representative with any questions. As of January 1, 2025

Current Cash Pool 7-day net yield

Your Representatives

Federated Hermes Participant Services Wayne.Perry@FederatedHermes.com 1-888-965-MMDT (6638) Wayne is responsible for managing the MMDT Participant Services team from the High Street office.

Wayne Perry

Federated Hermes Associate Sales Representative Caroline.Kafafian@FederatedHermes.com 724-809-1250 Caroline is responsible for relationship management with MMDT participants.

Caroline Kafafian, CIMA

For more information on how you can seek to take advantage of a rising-rate environment and invest in the MMDT Cash Portfolio, call 617-335-0770.

Federated Hermes Senior Vice President Senior Sales Representative Brian.Willer@FederatedHermes.com 617-335-0770 Brian is responsible for relationship management with MMDT participants.

Brian R. Willer, CIMA

Sweet spot

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MMDT is the state sponsored investment pool offered by the Commonwealth of Massachusetts to its public entities

,CFA

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Mortgage-backed Securities

Deborah Cunningham, CFA January 2, 2025

Three things to watch in 2025.

A gorgeous vista for cash managers

ARTICLE

Deborah Cunnigham, CFA December 2, 2024

Money market assets have reached a new mark.

Record high

ARTICLE