The Federal Open Market Committee is in tightening mode, having made several increases to the federal funds rate, with more expected on the horizon. This rising rates environment offers a renewed opportunity to organizations that can begin to leverage their short-term capital for gains.
“There is a benefit to segmentation and alignment of these funds with objectives. Whereas in the past, just having everything in one bucket probably was okay because there wasn’t really any variability.”—Fred Walls, Managing Director, Institutional Investment Solutions, SunTrust Bank
By adopting a three-tired approach that segments all cash reserves based on operating needs, core reserves and strategic objectives, organizations can begin to capitalize on this new opportunity.