How safe is your money market fund amid the Washington chaos? Probably pretty safe, outside of a worst-case debt-default scenario.
Only if the U.S. failed to pay its bills over an extended term—say, longer than a month or so—would depositors in normally ultra-safe money market funds hit trouble, most experts say.
That scenario would lead to a downgrade of government debt and a likely stampede of U.S. bond selling, which in turn would trigger losses in money market fund—MMF—accounts.
Though some analysts are advising preparation in case of a default, investors thus far are treating that extreme set of circumstances as unlikely.