Americans have so much spare cash parked in money funds that it earns them about $750 million a day, for doing nothing.

Left: cash in US money market funds ($tn), now a record $7.9tn. Right: the short-term rate money funds roughly pay, versus the average bank savings rate, which never leaves the floor. Money funds pay about 3.5% today; a bank savings account pays under half a percent.

Why this is happening

A money fund pays close to the Fed's short-term rate, about 3.5% now, for almost no risk. A bank savings account pays under half a percent, so a money fund is simply the better place to leave cash.
Every bout of uncertainty, from bank wobbles to elections to wars, sends more money to the safest corner that still pays.
Once cash lands there and keeps earning, people are slow to move it back out.

The take

This is the dry powder everyone watches. Rates have already fallen from over 5% to about 3.5%; if that yield keeps dropping, some of this $7.9 trillion goes looking for a better home, and that is a lot of fuel for whatever it picks.

Source: Investment Company Institute, Federal Reserve, FDIC (2026)