Investors Flock to US Money Market Funds Amid War-Related Risks

Assets in ultra-safe Treasury funds hit record highs as investors seek shelter from stock market volatility and inflation fears.

Mar. 20, 2026 at 10:05am

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As the conflict with Iran intensifies, investors are fleeing the stock market and traditional safe havens like gold in favor of money market funds, driving assets in these ultra-short-term Treasury funds to record highs of around $8 trillion. The spike in oil prices and rising inflation fears are spurring this shift, with investors seeking the perceived safety of cash amid the economic uncertainty.

Why it matters

The surge in money market fund assets reflects growing investor concerns about the broader economic impact of the Iran conflict, including the potential for stagflation. This flight to safety highlights how geopolitical tensions and supply shocks can drive dramatic shifts in investor behavior and market dynamics.

The details

The latest catalyst for the steady flow of assets into money market funds is the impact of soaring crude oil prices on the economy and inflation. Brent crude futures rose 1.2% on Thursday to $108.65 a barrel, after trading as much as 10% higher during the day. As all risk assets take on this uncertain path, dependent on oil, it is natural for cash to build on the sidelines.

  • On March 20, 2026, assets in US money market funds hit a record high of around $8 trillion.
  • Brent crude futures rose 1.2% on Thursday, March 20, 2026, to $108.65 a barrel.

The players

Malcolm Polley

Director of strategic market analysis with Stratos Investment Management, a wealth management firm.

Sweta Singh

Founding partner at money management firm City Different Investments.

Steven Wieting

Co-founder of CIO Group, a wealth management firm.

Deborah Cunningham

Chief investment officer of global liquidity markets at Federated Hermes.

Jacob Taurel

Managing partner at Activest Wealth Management.

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What they’re saying

“When you have times of dislocation and times of fear, cash is the only thing that makes sense to a lot of people, because there's the belief that you 'can't lose' by holding it.”

— Malcolm Polley, Director of strategic market analysis

“This is the 'wait-and-see' money coming from investors who are wary about what's happening right now.”

— Sweta Singh, Founding partner

“As all risk assets take on this uncertain path, dependent on oil, it is natural for cash to build on the sidelines.”

— Steven Wieting, Co-founder

“The elephant in the room is stagflation.”

— Jacob Taurel, Managing partner

“The collective negative vibe often sends investors to safer harbors, a category she told Reuters includes money market funds.”

— Deborah Cunningham, Chief investment officer of global liquidity markets

What’s next

Financial advisors are cautioning clients about being overly risk-averse and putting too much money into money market funds, as this strategy requires making two separate correct decisions: when to get into cash and when to move back into other assets.

The takeaway

The surge in money market fund assets reflects growing investor concerns about the broader economic impact of the Iran conflict, including the potential for stagflation. This flight to safety highlights how geopolitical tensions and supply shocks can drive dramatic shifts in investor behavior and market dynamics.