US Stock Market: Money market funds shorten maturities as Fed rate uncertainty drives cautious positioning

US money market funds have shortened portfolio maturities amid uncertainty over the Federal Reserve's policy outlook, with the Crane Money Fund Average weighted average maturity falling to 38 days in early July from 42 days a month earlier. Fund assets under management climbed to a record near $8 trillion, with managers increasing allocations to floating-rate notes and repurchase agreements while trimming Treasury bill holdings by $96 billion. The defensive positioning reflects a trade-off between softer repo yields and duration risk in a potentially higher-rate environment, with markets pricing about 80% probability of one Fed rate hike by December 2026.