Short-Term Fixed Income: The world cup of Jersey City

Research evidence excerpt

Short-Term Fixed Income: The world cup of Jersey City

Teresa Ho AC (1-212) 834-5087 Molly Herckis (1-212) 622-0899 Global Markets Strategy J P M O R G A Nteresa.c.ho@jpmorgan.com molly.herckis@jpmchase.com

J.P. Morgan Securities LLC J.P. Morgan Securities LLC 26 June 2026

Pankaj Vohra (1-212) 834 5292

pankaj.x.vohra@jpmchase.com

J.P. Morgan Securities LLC

Short-Term Fixed Income

The world cup of Jersey City

• A well-attended money market symposium in Jersey City highlighted key themes shap-

ing the very front end

• MMFs have cemented their role as the go-to liquidity vehicle. MMF AUMs should con-

tinue to rise through year-end, supported by typical second-half seasonality, elevated

uncertainty, and still-attractive yields that should sustain inflows

• Tokenized MMFs and deposits are emerging as more standardized offerings, though

broader adoption will likely hinge on stronger governance and improved investor edu-

cation

• The Fed may shrink its balance sheet, but not in the near term. Any material reduction

would likely be gradual, along with adjustments to liquidity regulations, and destigma-

tize the Fed’s facilities to support smooth funding-market functioning

• T-bill supply is expected to rise in the second half of the year. However, the added net

supply should be well absorbed and is unlikely to generate meaningful pressure in repo

markets

• Onshore and offshore MMF AUMs rose by $250bn to about $9tn in May, the largest

monthly increase since November 2024

• Government MMFs increased holdings primarily in Treasuries, with the bulk of the allo-

cations going to T-bills. Meanwhile, prime MMFs increased credit holdings by $30bn,

driven mainly by additive exposure to bank credit (CP/CDs)

• Short-term credit spreads widened slightly week over week.