Short-Term Fixed Income: Cash continues to roll in

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Short-Term Fixed Income: Cash continues to roll in

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 10 July 2026

Pankaj Vohra (1-212) 834 5292

pankaj.x.vohra@jpmchase.com

J.P. Morgan Securities LLC

Short-Term Fixed Income

Cash continues to roll in

• It’s been a soft start to the month for repo markets, wiith SOFR and TGRCR benchmarks

closing at 3.53% and 3.51% as of July 9

• MMF inflows may be contributing to the softer funding backdrop, with AUMs up about

$80bn MoM and roughly half of that increase occurring over the past six business days

• We continue to expect funding conditions to firm from current levels, particularly as

private investors will need to absorb roughly $216bn of net T-bill supply over the

remainder of July, alongside coupon settlements

• More broadly, net T-bill supply to private investors is expected to rise another $216bn

in August (nearly $405bn cumulatively over the next seven weeks). We continue to

favor being short August SOFR/FF at -1.5bp

• Low-duration bond funds have witnessed a strong start to the year, with AUMs increas-

ing by about $55bn through May—a 6% gain, lifting total balances to $986bn

• Growth may be partially driven by retail MMF investors extending into low-duration

strategies, particularly since retail MMF AUM growth has been muted this year and the

1m/2y yield curve has disinverted for the first time since early 2025...

• ...alongside positive performance, which likely contributed to inflows into low-duration

bond funds as well

• While some cash investors may rotate from retail MMFs into low-duration funds, we