Liquidity Lens: Q1 2026 | Insight Investment

In our view, money market funds can provide diversified, high-quality short-dated exposure that enables investors to earn short-term yields while maintaining daily liquidity and capital preservation. However, not all MMFs are constructed alike.

LVNAV money market funds are, in our view, well suited to volatile environments, combining a robust EU regulatory framework, stable pricing features and diversified exposure to high-quality short-dated assets.

• Fed maintains rates - The US Federal Reserve (Fed) maintained the fed funds rate at a target range of 3.5%-3.75%.
• Growth slows - The US economy grew at an annualised rate of 0.5% in Q4 2025, slowing significantly from the previous quarter’s 4.4% growth rate.
• Inflation rises –Year-on-year CPI inflation rose to 3.3% by the end of Q1, driven by higher energy prices linked to the conflict in the middle east.
• Consumer confidence – According to the University of Michigan, consumer sentiment fell sharply during the quarter, falling from 56.4 in January to 53.3 in March
• Unemployment end quarter unchanged – The US unemployment rate ended Q1 at 4.3%, slightly below the 4.4% rate recorded at the end of the previous quarter.

• Interest rates unchanged - The Bank of England’s Monetary Policy Committee kept the bank rate unchanged at 3.75% throughout the quarter.
• Unemployment rate unchanged – The UK unemployment rate remained at 5.2% in the three months to January 2026 (the latest available data).
• Consumer confidence declines - The GfK Consumer Confidence Index deteriorated to -21 by the end of Q1, down from -17 in December 2025, impacted by the outbreak in the middle east.
• Wage growth slows notably - Wage growth slowed notably in the three months to January, rising by 3.8%, the lowest rate of growth in more than five years.
• Annual GDP growth slows - Annual GDP growth in Q4 2025 was confirmed at 1%, down from the previous quarter’s 1.3% growth rate and in line with expectations.