Fitch: Stable credit conditions support neutral MMF outlook for ’25

Global credit conditions are expected to remain stable in 2025, underpinning a neutral outlook for money market funds (MMFs), according to Fitch Ratings. Measured policy rate cuts in major economies, with central banks closely monitoring inflation risks, are projected to maintain balanced industry flows.

However, geopolitical risks and concerns over a potential global trade war could spark market volatility, leading to outflows in stressed regions. Shifting inflation and interest rate expectations might also impact fund valuations, though a flight-to-safety could bolster inflows into the MMF sector.

Key regulatory developments include the US Securities Exchange Commission’s central clearing rule, which is expected to have minimal impact until implementation nears. European regulatory changes are anticipated to have limited effect due to prolonged lead times.

Attribution: Amwal Al Ghad English

Subediting: Y.Yasser