The drop followed last week's $32.27 billion jump that was the largest weekly rise since the third week of October 2013. In October 2013, there were huge swings in fund asset levels as investors rushed in and out of money funds due to fears about a possible US default when the government was expected to exhaust its then statutory $16.7 trillion borrowing limit.
Money funds are huge holders of ultra short-term government debt securities.
The large swings in assets likely stemmed from quarter-end cash demand and payments to settle securities purchases made the prior week, according to analysts.
In the latest week, taxable money market fund assets plunged $42.55 billion to $2.418 trillion with a $32.75 billion fall among prime institutional funds. Last week, taxable fund assets rose $32.79 billion. Tax-free assets decreased by $1.81 billion to $257.66 billion, according to the report, published by iMoneyNet.
The iMoneyNet Money Fund Average 7-Day Simple Yield for All Taxable money-market funds was 0.02 percent for 11 consecutive weeks. The iMoneyNet Money Fund Average 7-Day Simple Yield for All Tax-Free and Municipal money-market funds remained at 0.01 percent for a 100th straight week.