A BNY MELLON COMPANY

Insights & Ideas

Taxable Money Market Commentary

by Senior Portfolio Manager Patricia Larkin

Patricia Larkin

This is Patricia Larkin with a Money Market Commentary for February, 2014. 

  • The January employment report showed a weaker-than-expected gain of only 113,000 in non-farm payrolls, with the unemployment rate dipping to 6.6% from 6.7% in December. While employment growth remains positive, there are concerns, as the average growth in payrolls has dipped to 154,000 in the last three months from the 201,000 recorded during the prior three months. The markets will be focused on seeing if employment levels can rebound in coming months, helping to sustain the economic expansion.

  • Ben Bernanke chaired his final Open Market Committee meeting at the end of January. The Committee unanimously endorsed a further tapering of the Federal Reserve’s quantitative easing program. However, further weakness in upcoming employment or other economic reports could cause the Fed to slow or even halt this move toward normalizing rates. The incoming Chair, Janet Yellen, is assuming the helm at a delicate time and will be closely watched for any signs that she intends to change the Fed’s current stance on either monetary or regulatory policy.

  • The most pressing issue at the moment is the upcoming debt ceiling debate. It remains to be seen how this will play out, but the potential exists for significant market disruptions, should a last-minute solution not fall into place. The rising tensions between China and its Pacific neighbors are also a source of concern to the markets.

  • Given the uncertain environment, we continue to adhere to our long-held conservative credit philosophy while seeking to maintain appropriate levels of liquidity.

Investors interested in Dreyfus mutual funds should consider the investment objectives, risks, charges and expenses of the fund carefully before investing. To obtain a prospectus, or a summary prospectus if available, that contains this and other information about a Dreyfus fund, contact your financial representative or call 1-800-DREYFUS. Please read the prospectus carefully before investing.

An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market funds seek to preserve the value of an investment at $1.00 per share, it is possible to lose money by investing in a money market fund. Yield fluctuates and past performance is no guarantee of future performance.

The statements expressed in this commentary are those of the author as of the date of the article and do not necessarily represent the views its affiliates. The views expressed are subject to change rapidly as economic and market conditions dictate of Dreyfus or, and the statements in the commentary should not be construed as an offer to sell or a solicitation to buy any security. The commentary is provided as a general market overview and should not be considered investment advice or predictive of future market performance. Contact Dreyfus or your advisor for more current information.