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Government Money Funds Proving Unlikely Haven

More than $75B has flowed in over last four weeks despite looming debt-ceiling deadline.

By Alexandra Harris and Liz Capo McCormick, Bloomberg | Updated on August 24, 2017

Cash is flowing into short-term U.S. government debt funds at the fastest pace in more than six months, just when you might expect investors to be running for the exits.

Demand is surging even as lawmakers wrangle with a looming debt-ceiling deadline and investors become concerned about the Treasury missing payments on the securities held in most of the funds. More than $75 billion was deposited in government money-market funds in the four weeks ended Aug. 16, compared with outflows of about $18.5 billion from U.S. exchange-traded and mutual funds, Investment Company Institute data show.

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