Key facts
- Money market fund assets reached a record $7.5 trillion in Q2 2025.
- Repo lending allocation within money market funds increased to over $3 trillion.
- U.S. Treasury securities holdings in money market funds declined.
- The U.S. debt ceiling is cited as a factor influencing this shift.
- The debt ceiling is a legislative limit on national debt issuance.
Money market fund assets reached an all-time high of $7.5 trillion during the second quarter of 2025. A significant portion of this growth was channeled into repurchase agreement (repo) lending, with allocations in this sector exceeding $3 trillion. This substantial increase in repo lending occurred concurrently with a noticeable decline in the holdings of U.S. Treasury securities within money market funds. Analysts suggest that the binding nature of the U.S. debt ceiling may have contributed to this shift in investment strategy. The debt ceiling, a legislative limit on the amount of national debt that can be issued, can influence the availability and attractiveness of government securities for large institutional investors like money market funds.