Because issues of money market mutual fund shares for the quarter were only $0.2 billion, net, the major activity in this instrument was the shifting of ownership between sectors.

Prior to 2002, net annual issues of money market mutual fund shares were strongly positive, averaging over $300 billion (1999-2001). Since 2002, because of the Federal Reserve low interest rate policy, net redemptions of money market mutual fund shares ran at an average annual rate of about $309 billion.

The primary purchasers of money market mutual fund shares during the second quarter of 2004 were funding corporations ($62.2 billion, net) and other non-financial corporations ($13.3 billion, net).

(Funding corporations are funding subsidiaries, non bank financial holding companies, and custodial accounts for reinvested collateral of securities lending operations. Total financial assets of funding corporations in Q2 2004 were $1.2 trillion.)

The primary sellers of money market mutual fund shares were households ($41.6 billion, net), life insurance companies ($18.1 billion, net), state and local governments ($9.0 billion, net), and personal trusts and estates ($8.9 billion, net).

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