Fed rate hike seen as irrelevant in US$2.6t slice of debt market

New York

THE blowout US jobs report for October means the Federal Reserve may be weeks away from raising interest rates. For US savers earning next to nothing on US$2.6 trillion of money-market mutual funds, the move will barely register.

The reason is that there's an unprecedented shortfall in the safest assets, especially Treasury bills - a mainstay of money funds and traditionally the government obligations that are most sensitive to changes in Fed policy. The shortage means some key money-fund rates will probably remain near historic lows even if the central bank raises its benchmark from near zero next month.