Yield Surge Boosts American Wallets
The recent bond-market rout in the U.S. has led to a surge in yields, benefiting savers who are flocking to higher-yielding investment products. Americans have poured $36 billion into money-market funds, taking advantage of yields that have surpassed 5%. Retail money-market funds have seen a 25% increase in assets this year, reaching a record $1.5 trillion. Additionally, savings accounts at many banks are now paying above 4%. The influx of cash reflects the strength of the U.S. economy and the fastest pace of interest-rate increases by the Federal Reserve in decades. However, this shift has put pressure on regional banks and raised concerns about the long-term prospects of smaller banks.