OFR Short-term Funding Monitor - Insights

Tenor

The tenor of a financial contract refers to the amount of time before that contract expires. Tenor aggregates can be used to examine the provision of funding over different time horizons. These charts present insights into the tenor of financing across various short-term funding markets.

Money market fund investment holdings of repos by tenor

Aggregate value of money market fund investment holdings of repos broken out by tenor

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Money market funds are a type of mutual fund used for cash management by institutional and retail investors. As a group, these funds are the largest cash lenders in short-term funding markets. Money market funds provide liquidity to the markets. This liquidity allows issuers of short-term debt securities, such as corporations and governments, to roll over their financing.

This chart shows the aggregate value of money market fund investment holdings of repos by tenor, which is the amount of time between the initial trade of cash for securities and the repurchase of those securities. Money market funds adjust the term of their investments to match expected fund redemptions and to take advantage of expected interest rate movements. Because money market funds are the largest cash lenders in repo markets, a shift in their maturity preference affects the trading volume and the interest rates charged in those markets.

Series Used

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Suggested Citation

Office of Financial Research, “OFR Short-term Funding Monitor,” refreshed daily, https://www.financialresearch.gov/short-term-funding-monitor/ (accessed ).