Trillions in Cash Could Fuel Stock Rebound as Fed Shifts Policy
• There is nearly $6 trillion in cash sitting on the sidelines that could fuel further stock market gains as the Fed pivots on policy • Investors have piled into money market funds and other safe, short-term investments amid rising yields • With the Fed potentially done hiking rates, investors may shift cash into stocks and longer-term bonds to lock in yields • History shows cash tends to flow into risk assets after the final rate hike of a cycle, boosting equities and investment-grade debt • While not all money fund assets may flow into markets, signs are emerging of increased risk appetite, like declining volatility